Continuous competition lowers prices for home insurance policies

Home insurance premiums have decreased by 8.2% in the past 12 months, with the average annual buildings and contents policy now at £138. This decline is attributed to the COVID-19 pandemic and ongoing pricing battles on comparison websites, leading to increased volatility in the market. Consumer Intelligence predicts that insurers will need to implement new pricing rules in the coming months. 
One of the factors contributing to the decrease in premiums is the increase in people staying at home, which deters burglaries and reduces water damage claims. Additionally, there is a pricing battle in the home price comparison website market, with some providers trying to expand their home insurance book, prompting reactions from larger players. 
While new business premiums are expected to rise as the market stabilizes, the impact on home insurance is anticipated to be more significant than on motor insurance due to the large and old back books that home insurers have. 
Premiums have decreased by 6.9% since February 2014, with under-50s homeowners experiencing the most significant savings. London remains the most expensive region for household insurance, with the North East being the cheapest. Premium reductions are seen across all regions, with Yorkshire and the Humber recording the largest yearly price falls. 
Age also plays a role in premium differences, with under-50s homeowners paying slightly more than over-50s. The age of the property also affects insurance costs, with newer properties having lower premiums compared to older ones. 
The table below shows the average premiums and price changes in various regions around Great Britain:
- Wales: -3.9% change, £130 average premium
- East Midlands: -5.7% change, £128 average premium
- South West: -7.4% change, £135 average premium
- London: -7.8% change, £193 average premium
- Scotland: -8.2% change, £135 average premium
- West Midlands: -8.3% change, £129 average premium
- Eastern: -8.6% change, £133 average premium
- North West: -8.6% change, £128 average premium
- North East: -9.0% change, £123 average premium
- South East: -10.2% change, £145 average premium
- Yorkshire and The Humber: -10.9% change, £133 average premium
- Overall: -8.2% change, £138 average premium
For more insights on pricing strategies, download the Home Insurance Price Index from Consumer Intelligence's website.