UK Insurers: Premium Growth Still on the Slow Ride
According to the latest EY ITEM Club Outlook for Financial Services, the UK insurance market is looking to keep its feet on the ground. Premium income will climb steadily, but the pace will slow down as the economy resurfaces and consumer price hikes drift back toward the decade‑long average of about 3.4%.
The Numbers in a Nutshell
- Non‑life premiums: 5.2% growth in 2025 (down from 8.4% in 2024), followed by 4.3% in 2026 and 3.6% in 2027.
- Life premiums: 4.4% in 2025 (down from 5.8% in 2024), then 3.3% in 2026 and 3.7% in 2027.
Why the drop? Years of sharp price hikes were driven by cost surges, but falling interest rates and easing inflation are letting insurers breathe a little easier.
What’s Drove the Upswing?
As the housing market opens up and workers see real wage gains, demand for everyday protection—home and motor insurance—has been picking up. Meanwhile, supply‑chain headaches that once sent replacement parts for washing machines and cars through the roof are easing. That means insurers can dial back the “price-surge” tempo.
Life Insurance: Still Steady, but Watch the Wallets
Life coverage is holding its own, helped by a growing workforce that adds more workplace pensions. Yet EY warns that if household disposable incomes slow next year, it could nudge the growth of life premiums down a notch.
Insight from the Top
Martina Neary, EY UK Insurance Leader commented:
“The UK’s economic rebound is a bright spot for insurers and their customers. With interest rates easing and inflation stabilising, we’re seeing a steady climb in both general and life insurance demand. Though premium growth will be modest, the market remains rock‑solid.
But let’s not forget global turbulence and the unpredictable whims of weather—those could still shake things up. Insurers must juggle cost control, smart capital moves, and keeping the most vulnerable covered, all while exploring fresh paths to sustainable growth.”
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