Ratings agency Moody’s believes that personal and commercial lines rates have peaked and that although it expects results from UK property and casualty insurers to weaken it believes they will remain strong in the coming year. It said its outlook for the UK P&C sector remained stable.

Moody’s cited weaker than expected GDP growth in 2025 of 0.8% as a constraining factor on insurers, but said that the forecast increase to 1.3% in 2026 would benefit the commercial P&C sector, which is correlated to economic activity.

It said personal lines pricing had fallen sharply in 2025, driven largely by the motor market and said intense competition was making it difficult to harden rates. However, it said the ongoing and comparatively high interest rate environment was a positive factor for insurers’ investment returns.

Although regulatory scrutiny remains high for the UK P&C market, Moody’s stated: “We do not expect regulatory changes to materially affect sales or earnings over the course of 2026.”