Pricing consultancy Pearson Ham has said average premium finance costs for motor and home insurance have fallen during the past year although there was significant variance between the highest and lowest providers in the market. Pearson Ham said the dip reflected increased scrutiny from the Financial Conduct Authority.

The average cost of premium finance for motor insurance was 10.7% in September 2024, down from 11.9% in October 2023. But charges ranged from as low as 1.9% to 20.2%.

For home insurance, the market average was 8.3% in September 2024, down from 10% in October 2023. Charges ranged from zero to 36.8%

Stephen Kennedy, director at Pearson Ham Group, said: “The study indicates that while costs to consumers are beginning to ease, the level of variability may still be considered a challenge, potentially leaving some consumers exposed to disproportionately high charges. Pearson Ham welcomes the FCA's efforts to ensure transparency and urges insurers to continue refining their offerings to ensure consistency and fair value for consumers.”