Switching activity in the UK motor insurance market fell to its lowest level since early 2023 during the final quarter of 2025, as premiums eased and drivers grew less inclined to shop around, according to new analysis from LexisNexis Risk Solutions. For brokers, this points to fewer clients actively comparing quotes, which means brokers can't rely on passive inbound demand from price-driven shoppers the way they could over the past two years, and need to shift toward proactively engaging existing and lapsed clients at renewal rather than waiting for switching activity to bring business to them.
The LexisNexis Insurance Demand Meter UK for the second half of 2025 found that just 21% of consumers shopping for motor cover switched provider in the fourth quarter, the weakest conversion rate in almost three years. Daily shopping activity also fell sharply across 2025, with around 17,000 fewer consumers per day comparing motor policies than in 2024, though the trend edged up again in the final quarter, with roughly 1,000 more daily shoppers than a year earlier - a modest signal that engagement may be starting to recover, worth watching closely over the coming quarters.
The moderation in switching tracks closely with the wider premium picture. The Association of British Insurers' Motor Insurance Premium Tracker, which draws on around 28 million live policies, recorded nine consecutive quarterly falls in the average price paid for comprehensive cover before it edged up marginally to £560 in the first quarter of 2026, still £30 below the same period the previous year. When premiums are falling broadly across the market, clients have less financial incentive to shop around, since the gap between staying put and switching narrows. That's the direct mechanism behind the drop in switching activity, and it has a practical consequence for brokers: with premiums now edging back up in early 2026, that incentive to shop is likely to strengthen again, and brokers who've stayed close to clients through the quiet period will be better placed to capture that renewed shopping activity than those relying on inbound demand alone.
The report also pointed to a UK vehicle parc that is both older and cheaper than it was two years ago. The average value of an insured UK vehicle dropped by almost £1,000 between the second half of 2023 and the second half of 2025, to around £10,000, while average vehicle age rose by roughly five months over the same period, to around ten years and five months.
That ageing profile comes against a backdrop of rising repair costs. ABI figures for the first quarter of 2026 showed the average accidental damage claim reaching £3,699, up 8% quarter on quarter, with repairs accounting for £1.9 billion of the £2.9 billion insurers paid out in claims over the period. For brokers, that combination of falling vehicle values and rising repair costs is worth flagging directly to clients with older vehicles: a growing share of claims are likely to be assessed as total losses purely on cost grounds, even where the damage itself looks repairable, and clients should understand that risk before it becomes a claims-time surprise - a conversation that also doubles as a natural prompt to re-engage a client who might not otherwise be actively shopping their cover.
The report identified a marked shift in the vehicles being insured. Chinese car brands accounted for 1.2% of UK personal lines motor policies by the end of 2025, up from 0.6% in 2022, with the share climbing every quarter through the year. That trend has accelerated further into 2026. SMMT registration data shows Chinese-owned brands made up 11.12% of new UK vehicle registrations in the first quarter of 2026, up from 6.41% a year earlier, with BYD alone lifting its market share from around 1.6% to 3.47%. By mid-2026, Chinese-owned marques including BYD, MG, and Chery's Jaecoo and Omoda brands were estimated to command around 15% to 16% of new registrations, SMMT chief executive Mike Hawes said, as they applied sustained pricing pressure on established manufacturers.
The data gap flagged in the LexisNexis report has already caused underwriting friction. Thatcham Research, the UK's automotive risk intelligence body, has previously found some Chinese-built EVs difficult to insure, citing high repair costs, limited technical documentation and long lead times on replacement parts.
Thatcham has since worked with manufacturers including Chery, whose Omoda and Jaecoo brands enlisted the organisation to align vehicle design and repair processes with UK standards, and has introduced its Vehicle Risk Rating system to give insurers a structured view of a car's damageability, repairability, safety and security.
Battery repair capability is the sharper edge of that concern. A Thatcham survey with the Centre for Economics and Business Research found battery-related issues to be the leading worry for around 45% of insurers and 42% of repair professionals, with a replacement pack representing roughly 40% of an EV's total value. Thatcham has called on manufacturers to design batteries that can be diagnosed and repaired rather than written off after minor collisions, warning that a lack of affordable diagnostics is inflating EV claims costs. For a broker, this is a second, more specific opportunity to add value beyond the general engagement point above: any client considering a newer Chinese-brand EV should be told upfront to expect a narrower field of willing insurers, higher premiums than an equivalent established-brand vehicle, and a real possibility that battery damage from a relatively minor incident results in a total loss.
"Chinese vehicle manufacturers continue to expand their footprint across the UK market," said Tom Lawrie-Fussey, associate vice president of insurance product management, UK and Ireland, at LexisNexis Risk Solutions. He said this expansion can create challenges where limited historical claims and repair data is available, and that the industry was responding with growing demand for vehicle-level insights at the point of quote and claim, including intelligence on ADAS features that can help insurers assess risk, repairability and potential claims costs.
"It will become even more critical for motor insurance providers to deploy granular data on vehicles they are insuring to help ensure the product and price is right for the individual risk and that customers get the best outcome in a claim," Lawrie-Fussey said, adding that the market is simultaneously insuring a large pool of older cars with depreciating values, making knowledge of a vehicle's status, maintenance history and real-time worth central to fair pricing and transparency through the claims process.
The findings suggest a motor market entering a more complex phase after two years of retreating premiums, with rising repair costs, an unresolved data gap around newer Chinese entrants and an ageing fleet all converging to test insurers' pricing discipline through the rest of 2026. For brokers, the underlying message across all of this is the same: with client-initiated shopping activity at a low point, the businesses that gain ground over the next year will be the ones actively reaching out to clients about renewal, vehicle age and total-loss risk, and EV/Chinese-brand coverage gaps, rather than waiting for switching demand to recover on its own.
