January saw a continued decline in motor insurance premiums, with prices falling by -2.4% in the first month of the year, according to the latest general insurance price index from Pearson Ham Group. This marks the largest monthly decrease since May 2024 and brings the 12-month movement rate to -18.2%.

The median top five price for motor insurance fell to £464 in January, reflecting the sustained downward trend in premiums. The index found that the most significant premium reductions were among the youngest and oldest drivers. Motor insurance rates for under-26s and over-70s both declined by -2.9% in January, reinforcing a trend of sharper reductions at both ends of the age spectrum.

Stephen Kennedy, director at Pearson Ham Group, said: “The market has now seen 10 consecutive months of falling motor insurance premiums, with January marking the steepest drop since last May. The -18.2% annual decrease is particularly striking, especially given the steady increases we saw throughout much of 2023.

“The sharpest declines among younger and older drivers suggest insurers are recalibrating pricing, potentially in response to claims trends and competitive pressures, and could indicate some back versus front book strategies. Meanwhile, regional variations highlight how local market dynamics continue to influence pricing.”