Home insurers set for profit in 2025, with losses expected in 2026

• UK home insurers are set to finish 2025 with a slight profit, delivering a Net Combined Ratio (NCR) of 98%;
• Yet home insurers are expected to swing to a loss in 2026, with the NCR forecast to reach 102.1% by the end of next year;
• Home insurance premiums paid by customers are set to drop to an average of £326 in 2025, down from £329 in 2024 amid a falling claims environment;
• Premiums are expected to fall further in 2026 to an average of £306 – an almost 7% drop compared to 2025, as a result of increasing competition.

UK home insurers are set to make an underwriting profit in 2025, with a Net Combined Ratio (NCR) of 98%, according to analysis of industry data by Deloitte. This means that, for every £1 taken in premiums during the year, home insurers will have paid out 98p in claims and expenses.

For consumers, average premiums have remained steady in 2025, falling to an average of £326 for the year, compared to £329 in 2024. Deloitte forecasts that, in 2026, consumers will see a notable drop in their premiums, which are set to decline 7% to £306, driven by a further decrease in claims and a competitive UK market.

Cherry Chan, partner at Deloitte, said: “Home insurers will have breathed a sigh of relief at the relatively mild weather so far this winter, leading to fewer claims compared to this time last year. However, with subsidence claims expected to surge this year from a very dry summer, there may still be a sting in the tail of 2025 to come. They will also have one eye on the weather yet to come in the first quarter of 2026.

“For insurers, claims inflation has remained persistent throughout 2025 and is expected to continue into 2026. However, with customers spending more time at home post-pandemic and spotting potential issues earlier, the number of overall claims is down, keeping premium increases off the table.

“The market remains competitive, however, and insurers need to both hold on to existing customers and attract new ones. As a result, premiums are expected to fall in 2026, also leading to a consequent fall in underwriting profitability. Winning firms will be those that continue to focus on delivering outstanding service to customers, while doubling down on operational efficiency.”

ENDS

Notes to editors

1. Net Combined Ratio (NCR) is a measure of profitability used by insurance companies to measure how well they are performing in their day-to-day operations. The NCR presented excludes other income (such as investment income).
2. An NCR below 100% indicates that an insurer is generating a profit, whilst an NCR above 100% suggest that it is paying out more in claims and overheads than it is generating in income from premiums.
3. The 2025 and 2026 NCR figures featured in this press release are Deloitte analysis based on figures held by the Association of British Insurers (ABI). They are an estimate only. The ABI will publish final figures from its members in due course.
4. The figures featured in this press release for home insurance premiums in 2025 and 2026 are also based upon Deloitte analysis of figures held by the ABI. They are an estimate only. The ABI will publish final figures from its members in due course.
5. Deloitte subscribes to data from the ABI and has published it by permission as part of its own communications materials.