UK motor insurance premiums rise 4.3% in August: Jefferies
Claims tracker shows claims inflation at 4.1% year on year in August Jefferies expects UK motor insurers to post 107% combined ratio in 2026 Average premiums up 41.7% since early 2019, against 61.1% rise in claims costs By Ryan Hewlett Sept 18 (The Insurer) — British motor insurance prices rose 4.3% year on year in August but deteriorated on a sequential basis, with under-pressure margins leaving the industry on track to post a loss-making 107% combined ratio in 2026, according to Jefferies analysts. Motor premiums rose for the ninth consecutive month, although the 4.3% year-on-year increase in August represented a slowdown from the 8.5% rise recorded in July. “British motor insurance price increases moderated in August, although it remains to be seen if this is a blip that reverses in the coming months,” Jefferies said. On a sequential basis, prices dropped 1.3% month on month, a reversal from the five consecutive monthly increases through July. “We continue to anchor our focus on the year-on-year trend, as this better reflects the lived realities of the consumer who operates on an annual renewal cycle,” Jefferies added. The investments bank’s claims tracker index showed claims d
3% year on year in August but deteriorated on a sequential basis, with under-pressure margins leaving the industry on track to post a loss-making 107% combined ratio in 2026, according to Jefferies analysts. 5% rise recorded in July. “British motor insurance price increases moderated in August, although it remains to be seen if this is a blip that reverses in the coming months,” Jefferies said. 3% month on month, a reversal from the five consecutive monthly increases through July.
“We continue to anchor our focus on the year-on-year trend, as this better reflects the lived realities of the consumer who operates on an annual renewal cycle,” Jefferies added. 0% in July. Jefferies said the relatively stable claims inflation figures were “somewhat surprising” given the disruption in the Middle East, adding that insurers continue to assume a higher inflation level of 5% to 7%, which it said “may prove to be appropriately prudent”. 1% in August.
“Premiums fell materially in 2024, with the cumulative change in premiums and claims (since pre-pandemic levels) implying that a margin deficit emerged in September 2024,” it said. 4%. ” Using the latest data, Jefferies said it expects the UK motor insurance industry’s 2026 combined ratio to remain loss-making at 107%. This compares with EY's estimate of 108%.
“This is a -5%pts deterioration year-on-year, and slightly less cautious than EY's estimate of a -6%pts deterioration,” it said. “Most recent cyclical lows were 112% in 2022-23 and 109% in 2016, which preceded the upturn in pricing. ”