Insurance premiums for both motor and home continued their downward trajectory in Q2 2025, but the latest data from consultancy Pearson Ham suggests that a changing pace of movement as well as a more nuanced pricing environment could be on the horizon.

Average top-5 premiums for motor insurance fell by 4% in Q2, a sharper quarterly drop than the 3.6% recorded in the previous quarter. However, while the direction of travel remains downward, the scale of monthly reductions has become more restrained compared to late 2024.

Stephen Kennedy, director at Pearson Ham Group, said: “The market remains competitive and premiums are still falling, but the shape of the curve is changing. The pace of decline is slowing month by month, and that’s a signal that pricing is beginning to stabilise. What happens next will depend heavily on claims trends, consumer behaviour, and how aggressively insurers want to compete for new business in the second half of the year.”

Premiums for combined buildings and contents cover also fell in Q2, with average top-5 prices down by 3.8% for the quarter, closely mirroring the 3.3% drop seen in Q1. While the short-term picture is positive for consumers, premiums remain 23.6% higher than two years ago, a legacy of the exceptional inflation that dominated 2023 and early 2024.

Frances Luery, product manager at Pearson Ham Group, added: “The data shows a market that’s stabilising but still recovering from an extended period of cost inflation. Even with two consecutive quarters of falling premiums, we’re still well above 2023 levels. The challenge now is whether this downward movement has enough momentum to close that gap further – or whether we’ll soon see a floor to these reductions.”