The changes in motoring and motor insurance

Motoring has changed in the last 25 years – but perhaps not as we expected – what will the next quarter century bring?

Since 1994 a lot has changed on the UK’s roads – traffic has increased, we’ve moved from petrol to diesel and back again and now almost everyone has some form of telematic device, either sat nav or an insurance ‘black box’ on the dashboard.

Perhaps you won’t believe it as you sit in yet another traffic jam, but the last quarter century has seen a trend you might not expect, there has been a distinct fall off in the increase in motoring compared to the historic path of upward momentum.

Be it in number of vehicles registered annually, miles driven or number of trips. Having consistently risen throughout the twentieth century and with a substantial uptick in the total number of trips from 1975 to 1990, from 1995 onwards there was a perceptible and consistent fall in the increase in motoring1.

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A marked slow-down in the number of miles driven, a flattening out in the number of new annual registrations and perhaps most positive a 50% drop in road deaths since 1994. And alongside this there has been a gender rebalancing as women have increased their participation in driving, while young men in particular are driving less and are holding fewer licences.

For motor insurers the last 25 years has seen a major shake-up in the way insurance is purchased. In 1994, direct telesales of motor insurance, led by Direct Line in 1985 and followed hot on its heels by the likes of Admiral and Churchill, were taking off. The internet was still in its infancy and aggregator sites didn’t even fully get going until the turn of the millennium. Today it is estimated2 that 71% of consumers research their UK private motor insurance online and 26% buy in this way.



Looking forward to what the next 25 years could bring for vehicle transport, it’s clear that we stand on the edge of a major change in the way we, our families and the goods we buy and consume are transported.

Driverless cars, artificial intelligence, the move to electric vehicles, increase in homeworking and fall off in commuting and in-store shopping are the forces leading this change.

These changes are likely to see motor insurance transformed. ROSPA3 estimates that 95% of all vehicle accidents are caused by human error, so the adoption of autonomous vehicles could lead to a dramatic fall off in the number of accidents. And motor insurers could also see a significant reduction in the cost of fraudulent claims as they are likely to be almost impossible to make. In 2017, the ABI estimated that there were 125,000 fraudulent motor claims valued at an enormous £1.3 billion4

The Bank of England estimates that these changes will lead to a 21% contraction in the UK motor insurance market by 20405.

That doesn’t mean there will be no risk to be managed or insurance need at all. Future motor insurance is rather likely to be increasingly focused on design and technical vehicle faults, with risk management heavily weighted towards avoiding hacking. Motor insurance will have to evolve and perhaps look more like a product liability coverage rather than the motor insurance market we know today.

What is clear, is that we are entering a period of transition, which public sector risk managers will need to manage their way through. Navigating the transition from human to artificial intelligence on the road, will undoubtedly lead to some unwelcome meetings and possible clashes between the two very different drivers. Effective and comprehensive insurance cover that fills all the gaps as the landscape develops will be needed during this interim period.

Away from private road users, actual numbers of vehicles or journeys6 have fallen back by 10% since 2005 and driverless cars, particularly non-owned rented vehicles could spell the end of bus and coach fleets and possibly their depots and stations. The current debate in London about the future of Victoria Coach Station7, could be the first of many such debates and risks that local authorities will need to manage along with the need to reduce their roster of drivers, update road layouts to deal with autonomous vehicles, pedestrian and cyclists and make adaptions to reduce pollution. To say nothing of how changing vehicle use could fundamentally change where and how we live and lead to population falls or increases in some locations.
It is difficult to look at the current vehicle environment and accurately develop a detailed prognosis for the foreseeable future, and it’s even more challenging to look forward to the situation a quarter century from now. 

Could we be printing our own cars or shopping on a 3D printer at home, or sending the vehicle into the warehouse or shop direct to pick up goods, or have left the streets behind and be moving around by drone?

Whatever way we go comprehensive risk and insurance throughout will be vital to ensure a smooth transition.


This article and related document links do not purport to be comprehensive or to give legal advice. While every effort has been made to ensure accuracy, Risk Management Partners cannot be held liable for any errors, omissions or inaccuracies contained within the article and related document links.

Readers should not act upon (or refrain from acting upon) information in this article and related document links without first taking further specialist or professional advice.


Risk Management Partners Limited is authorised and regulated by the Financial Conduct Authority. Registered office: The Walbrook Building, 25 Walbrook, London EC4N 8AW. Registered in England and Wales. Company no. 2989025.











Risk Management Partners Limited is authorised and regulated
by the Financial Conduct Authority.
Registered office: The Walbrook Building 25 Walbrook, London EC4N 8AW.
Registered in England and Wales. Company no. 2989025.