FCA releases 2025 general insurance value measures

The Financial Conduct Authority has released its annual data on general insurance value measures for 2025, providing a snapshot of how claims costs and premiums are performing across the UK market. The regulator notes that the data is subject to ongoing review and expects to publish findings from a post-implementation review later this year. This publication supports broader efforts to ensure consumers receive fair value, particularly following recent interventions in the GAP insurance market and a response to a consumer super complaint.

Claims costs and premiums across the market

Home and travel insurance continue to show high levels of complaints relative to claims registered. Complaints accounted for 7-13% of home insurance claims and 5-6% of travel insurance claims. This range is significantly higher than the 0-6% seen in most other retail insurance products. Claims acceptance rates for home insurance sit at 62-71%, while travel insurance sits at 83-86%, and motor insurance sits at 99%.

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Officials warn that the home insurance acceptance rates should be used with caution due to inconsistencies in how firms report this data. The FCA has established an industry working group to address these reporting inconsistencies. Average claims payouts for home insurance increased by 17%, particularly for buildings and contents coverage, while claims costs as a proportion of premiums remained stable at 48% for home insurance, combining buildings and contents.

Travel insurance costs have risen sharply. Claims costs as a proportion of premium increased across all three travel products from 2024 to 2025, moving from 31-37% to 44-48%. While premiums increased by 12% for these products, the amount paid out in claims increased by 47%. This divergence suggests that while prices are going up, the actual costs of settling claims are rising much faster, potentially squeezing the margin available to insurers and affecting the ultimate value proposition for the consumer.

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Motor and specialty markets

At the aggregate product level, where at least 5 firms reported data and the data met our publication standards, we continue to see significant variation in claims costs as a proportion of premium, ranging from 17% for wedding and party insurance to 68% for healthcare cash plan (All). This is similar to the range in 2024, when the lowest was 20% for tyre cover (Add-on) insurance and the highest was 68% for healthcare cash plan (All).

Firms are responsible for submitting complete and accurate Value Measures data by 28 February each year. The FCA validates the data before publication to identify and clarify anomalies that may materially affect aggregate product data.