A Jefferies report released Wednesday shows that UK motor insurance prices increased 3.1% on a year-on-year basis in February 2026, continuing a trend of rising annual rates for the third month running.
On a month-to-month basis, however, prices fell 2.3% in February after a 2.3% rise in January. The February year-on-year rise follows a 4.1% increase in January and a 0.8% gain in December, according to Jefferies.
Jefferies said that current motor insurance prices are approximately at December 2024 levels and remain about 12% below the peak recorded in December 2023.
The report also tracked activity on price comparison websites, finding traffic dropped 17.9% month-on-month in February following a 17.7% rise in January. Year-on-year comparison-site traffic remained down 45.2% in February, a slight improvement from a 46.5% decline recorded in January.
Jefferies claims tracker indicated that claims costs rose 5.6% year-on-year in February while easing 0.5% month-on-month. The report breaks out the year-on-year movements for components weighted in the claims index:
- Spare parts (50% weighting): up 4.6% year-on-year.
- Maintenance and repair (30% weighting): up 6.0% year-on-year.
- Car hire (20% weighting): up 5.8% year-on-year.
Jefferies calculated the cumulative change in average motor insurance premiums since the start of 2019 at 34.9%. Over the same span, the change in claims costs reached 57.2%.
On industry-level profitability, the firm estimated a 2025 combined ratio of 108% for the UK motor insurance sector, equivalent to an 11 percentage point deterioration from the prior year, per the report.
These figures outline a market where annual premium inflation has returned after a period of declines, while claims inflation and component cost increases continue to exert pressure on the cost base tracked by insurers, according to Jefferies data. The divergence between cumulative premium increases and larger rises in claims costs since 2019 is also highlighted in the report.