On 10 December 2025, the final report of the UK Government's motor insurance taskforce was published. The taskforce was set up by the then new government in autumn 2024 in response to a manifesto commitment to investigate the costs and drivers of high motor insurance premiums, for private motor policies in particular. The important and high level take away from the report is that the government does not intend to intervene in the pricing of risks by insurers.

Before the general election in July 2024, spokespeople for the Labour party had taken a somewhat combative approach when discussing increases in motor insurance premiums in recent years. This created a potential risk that subsequent activity when in government, such as that undertaken by the cross-departmental taskforce, might yield outcomes and interventions that the industry may (to put matters neutrally) regard as unfavourable.

Today's final report, however, is far from that. It describes the UK motor insurance market as both “competitive” and “innovative”. In a critically-important passage it finds, on evidence published by the FCA in the summer, that the costs pressures facing motor insurers in recent years arise from external factors.

“The FCA’s July 2025 analysis of the drivers behind increases in motor insurance showed that higher premiums between 2019 and 2023 were largely due to increases in claims costs that were outside firms’ control, rather than profit. 

The passage continued: “These drivers included more complex and expensive cars, supply chain delays, a shortage of skilled labour, increased costs of replacement vehicles, rising bodily injury claims values, increasing numbers of car thefts and a rise in costs associated with uninsured drivers.”

Drawing from this, the reports says that the government is “confident” that the current regulatory framework delivers effective consumer protection and equips the FCA with the necessary “robust” powers to act against non-compliance or abuse.

As already stated above, the key take away from the report is that the government does not intend to intervene in the pricing of risks by insurers. The taskforce says clearly that differences in pricing are explained by differences in risk. It rejects intervention in pricing on the grounds that to do so in order to lower premiums for one group (younger drivers, for example) would “inevitably” result in increased premiums and reduced market access for other groups. The stand-out conclusion on this topic is that “the government has no plans to take these proposals [i.e. pricing interventions] forward at this time”.

Assertions that insurers may use customers’ ethnicity in pricing decisions are rejected in a carefully-worded single sentence: “Insurers do not collect data on individuals’ ethnicity and therefore don’t price directly based on it.”

Although the key decision by the taskforce is not to intervene in pricing matters, it nevertheless proposes a range of activities aimed at further improving the functioning of motor insurance market. These activities are grouped under the five themes (which have been adopted from the FCA claims analysis already referred to above) in the list at the foot of this article. The proposed ongoing activities will be taken forward by departments and regulators working with the industry and publication of the final report means, in the words of the accompanying Ministerial Statement, that “The taskforce’s work has now concluded.”

We believe that the ‘tone’ surrounding the proposed further work under these various themes is certainly much ‘softer’ and more collaborative than the approach adopted before the 2024 election. We suggest that the government’s decision not intervene in the market will be welcomed by the industry, as will the opportunity to work more constructively with government and other stakeholders to develop further initiatives over the medium term to improve transparency and customer outcomes.

Summary of actions from taskforce's final report

1. A well-regulated insurance market

• The FCA has published analysis on the motor premiums for particular groups and will publish conclusions on premium finance in 2026.

2. Improving the claims processes

• The FCA will work with the market on managing claims and costs more efficiently without adversely affecting customer outcomes, including reducing referrals to third parties.
• The government recognises work by the ABI and the Credit Hire Organisation (CHO) to revise market agreements to ensure fair credit hire charges for consumers.

3. Making our roads safer

• The report records the Department for Transport will publish a new Road Safety Strategy, very probably before the end of 2025. 

4. Tackling uninsured driving, fraud and crime

• The FCA will campaign for more action to be taken by social media firms to prevent fraudulent (such as ghost broking and spoofing ads) appearing on sites and it will seek to get such content removed.
• The Home Office will continue its efforts to tackle vehicle theft, introducing new offences (in the Crime and Policing Bill) relating to the use of technology by thieves to access vehicles (such as by cloning vehicle key codes) and the Department for Transport will review penalties for uninsured driving and support feasibility studies for introducing Continuous Insurance Enforcement in Northern Ireland.

5. Strengthening the vehicle repair sector

• The motor insurance industry will be “encouraged” to work closely with manufacturers to review the vehicle risk rating system and the Department for Business and Trade will collaborate with the sector by exchanging information on supply chain issues.