Automotive insurance coverage pricing has change into more and more advanced as insurers have adopted richer knowledge sources and extra superior modelling methods. The premium a shopper receives is now formed by 1000’s of interacting variables – behavioural, geographic, financial and aggressive.
But the market continues to be usually analysed as if it have been a single homogenous inhabitants – an assumption that more and more distorts how pricing motion is interpreted.
Whereas 2025 noticed total deflation, headline metrics danger obscuring the aggressive construction beneath. What seems to be a single market is in actuality a set of structurally distinct micro-markets, every responding in another way to progress ambition, margin strain and publicity administration. Because of this, the expertise of deflation was uneven: some customers noticed sharp reductions, whereas others skilled relative stability regardless of a softening market.
Headline metrics like common premiums or year-on-year charge motion flatten the nuance that drives actual pricing outcomes. Completely different merchandise compete in several methods throughout these micro-markets, every balancing progress, margin and publicity. A flat market can masks important motion beneath the floor, as opposing forces play out throughout totally different segments.
This method preserves aggressive construction
To make this construction seen, Client Intelligence has utilized clustering methods to our each day worth benchmarking knowledge. Quite than analysing the market as one blended inhabitants, clustering teams dangers into behaviourally and commercially coherent segments primarily based on observable pricing patterns. This method preserves aggressive construction, enabling evaluation that displays how insurers really compete, relatively than smoothing away the variations that form pricing technique.
At a headline market degree, the median of the 5 best quotes per danger fell from £617 in January 2025 to £566 in December 2025 – an 8.2% discount. When considered by way of eight driver clusters, the expertise of deflation was removed from uniform. Older home-owner {couples} noticed the sharpest decline, with median premiums falling from £465 to £398 (-14.4%), considerably steeper than the headline. Low-mileage claimers (-12.6%) and new skilled {couples} (-11.7%) additionally noticed reductions effectively above the market common.
On the different finish of the spectrum, youthful drivers noticed blended outcomes throughout 2025. Youthful customers insured on single-driver insurance policies noticed median premiums fall from £837 to £767 (-8.4%). Nevertheless, median premiums for youthful {couples} remained secure at round £800, rising barely by 0.4% in a softening market. This stability suggests sustained pricing warning in segments the place publicity and claims behaviour could also be perceived as much less predictable.
Pricing depth was redistributed
The identical sample emerges geographically. Areas with excessive concentrations of college college students noticed the most important discount, formed partly by elevated competitiveness in telematics propositions. City singles & renters (-10.1%) and disadvantaged working communities (-10.2%) additionally skilled above-average deflation. Against this, working home-owner neighbourhoods (-4.3%) and rural & farming communities (-5.8%) noticed extra modest motion, indicating firmer pricing gravity in lower-density, extra secure postcodes.
Taken collectively, the story of 2025 will not be merely that premiums fell. It’s that pricing depth was redistributed. The market didn’t transfer as one homogenous inhabitants. Clustering makes that construction seen, displaying not simply what modified, however the place it mattered, and for whom.
Understand how this view might strengthen your pricing or progress technique
In a market that not strikes as one, counting on headline averages dangers misreading aggressive depth.
Client Intelligence’s clustering method helps insurers see the place pricing strain is constructing, the place it’s easing, and which segments are driving the shift.
In case you’d like to grasp how this view might strengthen your pricing or progress technique, get in contact with our workforce right here:
