Two forecasts written before this summer already said UK home insurance would lose money in 2026.
Deloitte forecast in December that the market’s net combined ratio would rise from 98% in 2025 to 102.1% in 2026, with average premiums falling almost 7% to £306 (Deloitte). EY followed in March with 103%, or £1.03 paid in claims and expenses for every £1 of premium (Insurance Times). Both figures exclude investment income.
Then came the hottest summer on record. The ABI reported a record £20,000 average subsidence claim and £72 million paid in the second quarter alone (ABI). Hastings Direct said its August subsidence claims were almost 140% higher than a year earlier, and Aviva said it was reviewing its subsidence reserves, pricing models and exposure management (The Guardian).
Prices have barely turned. One quoted-price index found the most competitive combined premiums fell 0.7% over the second quarter, then rose 1% in June, its first monthly increase of this cycle. Its analysts said most large providers had already raised prices, and a smaller number of sharper cuts kept the average negative (Insurance Business).
Here is the detail worth sitting with. Most of the market has already decided to reprice, and a few firms are still buying share. Those few set the headline.
Nobody wants to move first in personal lines. Price comparison sites rank on price, and the firm that reprices loses new business to the one that does not. That is how soft markets outlast the numbers.
But subsidence claims take months to settle, so a firm still pricing to the old frequency in October is writing claims it has not yet seen. And under the Consumer Duty, a product priced below its cost does not become better value. Customers find out when the correction comes all at once.
A market that knew in December it was heading for 102% had time to price for the promise it is making. The firms that reprice steadily, and explain why, will spend less on the correction than those who wait for a storm to make the case for them.