Data from pricing consultancy Pearson Ham has shown that motor premiums fell by 2.9% in Q3 of this year, extending a downward trajectory that began in April 2024. Combined buildings and contents premiums were down by 4.9% in Q3, which was the fifth consecutive quarter of decline.

Despite the falls, Pearson Ham said motor premiums were still 9% higher than at the start of 2020. It said this highlighted how far the market has yet to unwind from the pandemic-era and post-GIPP inflation.

It said premiums in the home insurance market are 6.4% higher than two years ago, emphasising the impact of the spike in 2023 and early 2024.

Stephen Kennedy, director at Pearson Ham Group, said: “Motor insurance pricing continues to edge down, but the rhythm of reductions has steadied. We’re now in a more controlled phase of competition - one where insurers are refining their positioning rather than driving headline price cuts.

“This suggests the market is nearing a natural floor, and from here we expect to see greater divergence in pricing by customer type, risk profile and distribution channel as insurers seek sustainable market share rather than short-term volume.”

Frances Luery, product manager at Pearson Ham Group, added: “We’re seeing a pattern of sustained competition across the home insurance market, with premiums now materially lower than last year. The key question now is how much further prices can realistically fall before we see renewed upward pressure from claims trends and weather-related losses heading into winter.”