At ERS Live 2025, we brought together brokers from across the UK to reflect on a challenging but pivotal year for the motor market, share how ERS performed and outline where we are investing for 2026 and beyond.
We also explored one of the most significant developments facing our industry: the arrival of autonomous vehicles and the impact of the Autonomous Vehicles Act.
Watch ERS Live here
The 2025 Motor Market: Pressure Beneath the Surface
A key inflection point came in December 2024 with changes to the Ogden discount rate, which reduced reinsurance costs for the protection of larger claims by around 18% to 20%. This was a key factor in rate reductions, particularly in Personal Lines, where premiums fell sharply and put pressure on insurer expense ratios and broker earnings.
In Commercial motor, the picture has been more mixed. Taxi, Courier and single vehicle risks broadly followed personal lines downward, while Fleet, Agriculture and High Net Worth risks remained more resilient. Although we did see a notably more competitive Q4, the most competitive we’ve seen in quite some time. This was driven in part by many large insurers being short of premium across multiple classes, leading to aggressive pricing and commission structures that raise questions about long-term sustainability.
At a market level, the profitability of UK Motor Insurance remains thin. Latest industry forecasts suggest that the UK motor market will finish 2025 with a combined ratio of around 101%, meaning underwriting profit has effectively disappeared and results are reliant on investment income alone.
What’s Driving Market Performance?
Three core factors continue to shape motor results:
Rates: After steep increases post the claims inflation peak in 2022, private car rates fell through 2024 and 2025. More recently, we’ve started to see some flattening of rate reductions, with expectations that rates will rise gradually through 2026. Rates in more specialist classes are likely to need to match claims inflation.
Claims frequency: 2024 saw a notable reduction, driven by lower speeds, behavioural changes as premiums rose, and ongoing vehicle safety improvements. That trend flattened in 2025 and saw the frequency of third-party damage claims begin to rise again.
Claims severity: Costs remain under pressure due to global supply chain risks, the price of vehicle parts, and inflation in used car values, particularly for older vehicles and those affected by post-COVID supply gaps. Changes to Electric Vehicle (EV) taxation may further push demand back towards used petrol and diesel vehicles, adding to inflationary pressure.
The combination of falling rates, stabilising or rising frequency, and persistent severity inflation creates a challenging outlook for the whole market.
ERS Performance: Stability Through Specialism
Against this backdrop, we have continued to perform strongly. In 2025, we grew to over £500m in gross written premium for the first time, while continuing to outperform the wider motor market by a significant margin. Over the last six years we’ve consistently beaten market combined ratios, with the gap widening substantially over the past three.
This matters for two reasons. Firstly, it allows us to provide pricing stability for brokers and customers, even when the wider market is volatile. Secondly, it enables us to reinvest in our people, products and technology to strengthen our proposition for the long term.
Our performance is underpinned by a highly diversified portfolio, deep specialist expertise, and real-time access to data across policy and claims, allowing us to price accurately and react quickly to emerging trends.
Investing for 2026: People, Digital and Claims
Looking ahead, our investment priorities are clear:
People: We continue to build on a stable, experienced underwriting leadership team, supported by strong internal progression and targeted external hires. In 2025 alone, we added multiple regional underwriting roles to get closer to brokers, particularly in Agriculture and High Net Worth Personal Lines.
Digital trading: Over 90% of our non-Fleet business is traded digitally via software houses, eTrade or API connections. In 2026, we’ll extend this further, including the launch of a brand-new eTrade platform and the digital rollout of our Farmers Plan product in Q1 – this is a major step forward for Agricultural brokers ahead of peak season.
Claims automation: We’ve invested heavily in digitising first notification of loss, with over 98% now processed automatically. Next comes image capture, AI-driven damage assessment, faster total loss settlements and deeper integration with our repair networks, all designed to get customers back on the road faster and keep you informed at every stage.
Enhancing Our Private Client Proposition
In High Net Worth motor, 2025 marks our eighth full year of trading, with our proposition well established as a top three provider in the market. Following extensive broker research and feedback, we’ll be launching a new two-tier proposition in 2026: Private Client Prestige (our existing, flexible offering) and Private Client Ultimate, designed for large collections and Ultra-High Net Worth clients, with broader cover, higher limits and market-leading features – stay tuned for more on this product in the coming weeks, with new wordings and exciting launch events!
Motor Innovation and the Autonomous Vehicles Act
The most transformative development discussed at ERS Live was the future of mobility.
Through our Motor Innovation portfolio – spanning embedded, connected, short-term and autonomous risks – we’re already insuring some of the most advanced mobility providers in the world.
The Autonomous Vehicles Act, introduced in 2024, provides the legal framework for fully autonomous vehicles to operate on UK roads by 2027. It clarifies liability, sets safety standards, and places insurers at the heart of delivering fast compensation, supported by robust data-sharing and recovery mechanisms.
In practical terms, we expect to see:
- Robo-taxis and automated ride-hailing in city centres
- Autonomous delivery vehicles and last-mile logistics
- Self-driving shuttles and buses on fixed routes
- Increasing hands-off capability in private vehicles
These changes will fundamentally reshape motor insurance, shifting focus from driver error to system performance, software, data and cyber risk. We are already underwriting autonomous trials today and we will continue to design products to ensure we’re ready to support you as these risks move from innovation to mainstream.
Looking Ahead
2026 marks our 80th anniversary, and our strategy remains unchanged: we are a specialist, motor-only, broker-only insurer, focused on supporting the passions and livelihoods of your customers.
Despite market uncertainty, our strong performance allows us to offer stability, invest with confidence, and prepare for the next generation of motor risks.
We look forward to continuing to work in partnership with you as the market evolves through 2026 and beyond.
