We present the results of our analyses of the performance of the UK motor market for the year ending 31 December 2025, along with commentary on market issues up to the publication date. Our report focuses on the two Solvency II lines of business covering motor insurance: motor vehicle liability and other motor. The analyses rely mainly on information contained in the quantitative reporting templates in the 2025 year-end solvency and financial condition reports of UK motor insurers.
The report covers the following highlights.
- Motor gross written premiums: In 2025, our sample of 35 UK non-life insurers wrote £21.9 billion of motor premiums, down from £22.8 billion in the prior year.
- The motor market is continuing to evolve: Despite continued claims cost pressures, the market softened materially and average premiums fell.
- Fraud remains a significant pressure for the UK motor market: The nature of fraud risk is changing, with AI becoming more of a problem.
- Differing and evolving vehicle types: Electric vehicle adoption continued to grow strongly in 2025, with licensed battery electric vehicles reaching almost 1.9 million, a 35% year-on-year increase.
- External factors impacting the motor market: Rising repair costs are being driven by inflation and the increasing complexity of vehicles, including sensors, cameras and advanced driver-assistance systems, while pothole-related claim costs remain a visible pressure, often in the range of £4,000 to £6,000.