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Understanding the Hard Market: Why Premiums Are Rising

1. Inflationary Pressures April 2025 saw UK inflation unexpectedly surge to 3.5% (6), compounding insurers’ operational costs. This impacts premiums through: Repair cost increases:…

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1. Inflationary Pressures

April 2025 saw UK inflation unexpectedly surge to 3.5% (6), compounding insurers’ operational costs. This impacts premiums through:

  • Repair cost increases: Vehicle part prices rose 19% year-on-year in Q1 2025 (2)
  • Labour rate hikes: Garage labour costs now average £72/hour, up 14% since 2023 (2)
  • Claims administration: Insurers report 22% higher processing costs due to wage inflation (1)

2. Motor Insurance Challenges

Recent data reveals critical pressures in vehicle coverage:

  • Record claims payouts: £11.7bn in 2024, with average motor claims hitting £5,300 (2)
  • Theft epidemics: 375,048 vehicle thefts reported in England/Wales (2024) (3)
  • Electric vehicle complexities: Battery repairs now account for 31% of EV claim costs (5)

3. Market Cycle Dynamics

The current hard market phase (beginning in 2020) shows signs of easing but remains impactful:

  • Non-life premium growth slowing to 5.2% in 2025 vs 8.4% in 2024 (1)
  • Insurer profitability pressures maintaining upward rate momentum 
  • Predicted soft market indicators not materialising until late 2026 

Sector-Specific Pressures Driving Specialist Demand

Commercial Vehicle Insurance

Courier operators face particular challenges:

Factor2024 Average2025 Projection
Annual Premium£1,800£2,100 (+17%)
Theft-Related Claims28% of policies34%
Goods-in-Transit Cover£450 add-on£600 (+33%)

Sources: (4), (5)

These increases make underinsurance economically unsustainable for delivery businesses. As one courier operator noted: “Running without proper goods-in-transit cover now risks fines exceeding £5,000 per incident” (4).

Landlord Insurance Complexities

Property investors contend with:

  • 22% rise in unoccupied property claims since 2023 (1)
  • Building material costs up 14% year-on-year (1)
  • New EPC requirements increasing upgrade costs by £3,800/property (5)

How QuoteSearcher Delivers Value in a Hard Market

QuoteSearcher does more than connect insurance seekers with over 100 specialist brokers – we actively support our broker partners with real-time market insights and collaborative data sharing. 

Through ongoing conversations with our network, we highlight where there is strong lead volume or untapped capacity, helping brokers identify new opportunities and areas for growth. For example, we can share data such as how many taxi insurance leads have come from London in the past six months, the split of tenant types within our landlord product in the last 12 months, or the amount of traders we have seen with trade bonuses within city centre areas in the last 6 months. This gives brokers the intelligence they need to have informed discussions with their underwriters or to consider products they might otherwise overlook. This approach means we’re not just a one-stop shop for leads; we’re a partner invested in helping brokers find real-time, high-intent customers and expand their business in specialist areas.

At the same time, we help match consumers who may be struggling to source quotes with brokers who have the expertise to meet their needs, ensuring both parties benefit from our live, transparent data and specialist focus.

Looking to get in touch with us? Compare Specialist Quotes Now or Explore Broker Solutions.

References:

  1. Luttig, V. (2025, February 25). Ey item club outlook for UK insurers. EY. https://www.ey.com/en_uk/newsroom/2025/02/uk-insurers-to-report-steady-but-slowing-premium-income-growth 
  2. C., Scott, K., McNeil, H., Cowen, J., Scott, M., Kapani, C., Guy, J., & Scott, H. (2025, February 17). Motor claims hit record £11.7bn as repair costs rise. Insurance Times. https://www.insurancetimes.co.uk/news/motor-claims-hit-record-117bn-as-repair-costs-rise/1454462.article 
  3. Latest UK car theft statistics 2025. Zego. (n.d.). https://www.zego.com/car-insurance/car-theft-statistics/ 
  4. Richards, C. (1970, April 15). What is Courier Insurance & Who Needs it?: 2025 UK guide. SimplyQuote. https://www.simplyquote.co.uk/insights/what-is-courier-insurance/
  5. Speciality insurance: Trends, challenges, and innovations in the UK market. FintechOS. (2024, June 18). https://fintechos.com/blogpost/speciality-insurance-uk-market-trends/
  6. UK inflation jumps in April, raising prospect of Boe Rate Cut Delay | reuters. (n.d.). https://www.reuters.com/world/uk/uk-inflation-jumps-higher-than-expected-35-april-ons-says-2025-05-21/ 

 

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