UK car insurance prices set to increase
Key Points
- Admiral raised UK car insurance rates in the first half of 2026, ahead of the wider market
- The insurer expects average claims costs to rise 5% to 7% across the year
- Higher energy prices tied to the Middle East conflict are pushing up repair and replacement costs
- Motor turnover fell 5% to £2.15 billion as more customers renewed rather than switched in
- Admiral also raised home insurance rates while the rest of the market cut
Admiral has pushed up the rates it charges UK motorists ahead of the wider market and expects claims costs to rise by 5% to 7% this year.
The insurer, which covers 5.77 million vehicles in the UK, set out the increases in its half-year results on Thursday (6 August). Admiral cut prices through the first half of 2025 as competition in the motor market intensified, then reversed course and raised rates over the first six months of this year.
Group Chief Executive Milena Mondini de Focatiis said the company had moved earlier than the rest of the market after a softer period in the pricing cycle.
The group is still feeling the effects of last year’s cuts. Motor turnover fell 5% to £2.15 billion from £2.27 billion a year earlier, which Admiral put down to a shift in its sales mix towards renewals, where average premiums sit lower than on new policies.
The number of vehicles it insures held flat against June 2025 and fell 1% against the end of last year. Motor profit dropped 18% to £456.9 million.
What is pushing prices up
Admiral expects average claims costs to rise by between 5% and 7% across 2026, the same range it recorded last year, while the number of claims it receives has stayed flat.
The company pointed to the conflict in the Middle East, which disrupted energy supply, shipping routes and aviation, and raised the price of oil-based products such as plastics and paints. Those materials feed directly into the cost of repairing and replacing damaged vehicles.
Electric vehicles now make up a growing share of the book, with the number of EVs Admiral covers up 27% on the year. The company also runs a free subscription service aimed at the running costs of EV ownership.
Drivers who spread payments across the year saw a small change in the other direction. Admiral trimmed the annual percentage rate it charges customers paying by instalment, one of the reasons its non-premium income per vehicle fell to £68 from £77.
Home insurance is moving the same way
Admiral raised household rates over the first half of the year while prices across the rest of the market came down.
The number of homes it covers grew 3% to 2.21 million, helped by its More Than brand, though turnover fell 3% to £268.6 million as older, cheaper policies worked through.
Household profit came in at £24.9 million against £25.2 million a year earlier.
Milder weather kept claims down over the period. Admiral said the combined cost of freeze, flood, storm and subsidence claims landed well below what it had budgeted for, a swing that worked in its favour by 7.1% of premiums against 1.2% a year earlier.
