Decreasing Home Insurance Rates Reported by Consumer Intelligence
UK Home Insurance Premiums Continue to Fall, Reflecting Market Competition and Product Variety
According to a report by Consumer Intelligence, the UK home insurance market is witnessing a continued decline in average quoted prices. Over the past 12 months, average home insurance quotes have fallen by approximately 7.9%, marking the fourth consecutive quarter of decreases. In June 2025, around 62.5% of quotes were below £200, an increase from 56% a year earlier.
This downward trend can be attributed to increased competition and more product availability. In June 2025, the top competitive pricing came from nine insurers, up from six in the previous year.
Key factors influencing these premium reductions include:
- Competition and product variety: A greater number of insurers are offering competitive quotes, leading to more choices for consumers.
- Market segmentation: Insurers are expected to further segment the market based on property type, location, and claims experience, leading to more targeted premium adjustments.
- Claims history and inflation: Despite recent price reductions, average premiums remain about 23% higher than mid-2023 levels, reflecting lingering inflation and elevated claims costs from previous years.
- Use of premium finance: More consumers are paying premiums in instalments, which can influence consumer behavior and overall cost perception.
- Influence of weather-related claims: Adverse weather events have driven up claims costs, but there has been a noticeable easing trend recently.
- Growth of price comparison websites (PCWs): PCWs dominate consumer research and purchasing decisions in home insurance, helping drive competition and pricing transparency. Over half of home insurance customers use PCWs, preferring familiar brands, which contributes to premium competition and accessibility.
However, residual effects of inflation, claims costs (especially from weather events), and insurer risk segmentation continue to influence premiums and create variability across different customer groups and locations.
For instance, the biggest fall in quoted premiums over the past year was in the North East, recording a 10.5% drop. Meanwhile, the over-50s have seen bigger drops in quoted premiums over the past three months at 4.3% compared with 3.4% for the under-50s. Additionally, homes built between 1850 and 1895 have seen the most significant drop in quoted premiums over the past three months, with a decrease of 4.6%.
Laura Vas, Senior Insight Analyst at Consumer Intelligence, states that some firms have been reducing prices significantly in the contents-only market. However, she also notes that buildings claims may still be a challenge for insurers.
In conclusion, the UK home insurance market is experiencing a downward trend in premiums due to stronger competition, wider product choices, and more extensive use of premium finance and PCWs. However, residual effects of inflation, claims costs, and insurer risk segmentation continue to influence premiums and create variability across different customer groups and locations.
[1] Consumer Intelligence, "Home Insurance Price Index," June 2025. [2] Consumer Intelligence, "Home Insurance Market Report," Q2 2025. [3] Consumer Intelligence, "Consumer Finance Trends Report," Q2 2025. [4] Consumer Intelligence, "Weather-Related Claims Impact on Home Insurance Premiums," Q1 2025. [5] Consumer Intelligence, "Price Comparison Website Usage in Home Insurance," Q1 2025.
- The increased competition and product variety in the UK home insurance market extends to other sectors, with motor insurance providers also offering a wider range of policies to meet the varying needs of their customers.
- In the business sector, firms are implementing finance strategies that involve premium finance arrangements, allowing their clients to pay insurance premiums in manageable installments, thereby influencing consumer behavior and overall cost perception.
