Personal lines report
Insurance consulting Insurance market insight Insurance analyticsLCP's annual personal lines report explores the historical market performance, claims trends and projections shaping the outlook for motor and home insurers in 2026 and 2027.
Turning point: Market outlook for personal lines insurance
Premiums are starting to rise again on motor and home insurance, but profitability remains under pressure. Understanding the forces shaping personal lines insurance is essential for insurers reviewing their assumptions and planning ahead.
Our 2026 report explores what drove recent performance in 2025 and and sets out our market projections for 2026 and 2027.
Key findings include:
- Motor’s recovery looks short-lived. Following a return to underwriting profit in 2025 with a market net COR of 96%, we project underwriting losses in 2026 and 2027, with COR jumping to 108% and then 110%.
- Home insurers face continued pressure following an unprofitable year in 2025 with a market net COR of 104%. Another subsidence surge year in 2026 pushes our forecast for 2026 COR up to 107% in 2026, with a slight recovery to 106% in 2027 assuming typical weather.
- The Pet insurance market remains competitive with several new entrants announced in 2026. Both 2025 and 2026 have seen lots of seasonal claims related to the hot weather. We forecast a relatively stable loss ratio in 2026 and 2027 as rate increases broadly offset inflationary cost pressures.
Explore the 2026 personal lines report
Read nowMotor insurers face a challenging outlook, with rising claims costs and last year’s premium reductions eroding the recovery in profitability. Premiums have started to rise in 2026 but increases remain limited against a backdrop of persistent claims inflation. We expect a return to underwriting losses in 2026, with further deterioration in 2027.
Richard York-Weaving Senior Consultant and report author
UK home insurers face mounting pressure from softer pricing, claims inflation and weather volatility, with subsidence remaining a key risk. Disciplined pricing, reserving and resilience will be important over the rest of 2026 and into 2027.
Katie Garner Senior Consultant and report author
Personal lines webinar 2026
Explore the market performance, claims trends and projections shaping the outlook for motor and home insurers in 2026 and 2027.
Your questions answered
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Personal lines insurance are retail insurance policies sold directly to individuals. Car insurance, home insurance and pet/travel insurance are all examples of personal lines insurance products. LCP’s annual personal lines report analyses UK motor, home and pet market performance using SFCR, ABI and FCA data. It projects combined ratios, claims trends and premiums for 2026 and 2027.
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This type of insurance typically covers motor vehicles, travel, pets, homes and other personal assets.
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LCP projects UK motor insurers’ net combined ratio will rise from 96% in 2025 to 108% in 2026 and then 110% in 2027. This is driven by relatively flat average premiums, but ongoing claims inflation increasing the costs that insurers face.
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LCP projects UK home insurers’ net combined ratio will rise from 104% in 2025 to 107% in 2026, before easing slightly to 106% in 2027. The drivers are a second consecutive subsidence surge year, rising claims severity across most perils, premium increases of around 4% in 2026 that trail claims inflation, and continued strengthening of prior-year reserves.
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A net combined ratio is a key measure of how profitable (or loss making) an insurer is. It’s the ratio of claims and expenses paid out, to premiums received. A combined ratio under 100% means an insurer is making a profit, whereas over 100% means a loss.
