At the end of Q3, motor insurance premiums were 2.7% higher than they were at the same time last year. This is the first year-on-year rise since 2023, according to the data which comes from the latest Defaqto market pricing motor insurance price index.

The index measures an average of the top five quoted premiums. During Q3 this year, premiums rose by 0.4% in July and 0.2% in August, before falling by 0.1% in September. There were significant differences in rate movement across the providers analysed. These ranged from a reduction of 3.5% to an increase of 9.6%.

Stephen Kennedy, director at Defaqto, said: “This is the first quarter since 2023 that our motor index has ended with competitive quoted premiums above their level a year earlier. It marks an important change in the annual picture following two years of sustained price reductions.”

He added: “Insurers continue to face inflationary pressures, while their underwriting performance and appetite for growth differ. Those differences are reflected in the spread of provider movements, with competition continuing to shape pricing decisions.”