The UK's motor insurance sector is heading for troubled waters, with warnings that losses could mount as early as next year. While much of the attention has focused on the private car market, commercial brokers are already bracing for the ripple effect - questioning whether affordability and availability will hold up in the months ahead.
Forecasts from EY suggest the personal lines motor market will narrowly avoid a loss in 2025, posting a flat net combined ratio (NCR) of 100% before slipping to a forecasted 107% in 2026. That projection - driven by relentless claims inflation, parts shortages and increased repair complexity - has prompted concern among commercial brokers about whether their segment will remain insulated for long.
“Commercial motor brokers are aware of the rising costs insurers are facing,” said Helen Garlick, commercial account executive at Brown & Brown. “This has been exacerbated by the shortage of parts and rising costs to repair vehicles, increased timescales in settling claims and the ongoing issues with injury claims costs.”
While consumer premiums are expected to fall by 6% this year before rising by 5% in 2026, such volatility is far less easily absorbed on the commercial side, where fleet policies, hire contracts and specialist vehicles are more difficult to price and place.
Garlick points to structural challenges that go beyond private motorists. “New technology in the motor industry such as electric cars and batteries have changed the traditional methods of repairs,” she said. “The inherent design of vehicles in the modern day is more geared to replacing parts rather than repairing them, hence there has been a shift in the skills and availability in the motor garage industry with a shortage of repairers.”
This repair gap is already affecting commercial fleets, particularly those that rely on electric vans or modified vehicles where parts must be ordered or sourced through specific manufacturers - delaying claims resolution and compounding downtime costs.
Windscreen replacements, often seen as a minor repair, now frequently involve recalibrating built-in technology such as sensors or cameras - costs that commercial policies are increasingly having to absorb. “Windscreen claims costs are also now more expensive due to built-in technology,” Garlick noted. “Insurers can no longer ignore simple windscreen repairs and are facing much higher costs to replace them.”
The deeper challenge, brokers fear, is that pressure on underwriting margins may lead to retreat. “Insurers will likely harden premiums or reduce capacity to try and protect their books,” Garlick warned. “Some insurers may pull out of the motor market completely. This obviously has an effect on customers’ premiums and choice when it comes to commercial motor products.”
This could be particularly acute in sectors such as haulage, courier services, construction and utilities - areas where cover must be tailored and any interruption in insurance availability can stall operations.
Despite these pressures, there is hope that technological innovation could play a role in cost containment. “Insurers will no doubt be aware of the issues they are facing and looking into ways to soften this,” Garlick added. “Increased technology with cameras and trackers can help to defend claims costs and deals with parts suppliers and approved garages may help curb rising costs.”
Nonetheless, the sentiment across much of the commercial market is one of cautious expectation. As private motor lines edge toward unprofitability, there is little confidence that commercial will remain unaffected - particularly in a market where repair costs, injury settlements and parts delays cut across sectors.
Brokers, therefore, face a crucial year ahead. The question is no longer whether the strain on private motor insurers will affect commercial - it’s how soon and how hard.
