The rate of decline in UK home and motor premiums is slowing after three years of reductions, according to the British Insurance Brokers’ Association (BIBA).

Executive Director Graeme Trudgill says consumers have enjoyed falling premiums since 2012.

Private car insurance has benefitted from legal reforms to curtail spiralling claims costs, and an absence of major weather events in the past year has helped keep home premiums low.

However, the latest Insurance Price Index, compiled by BIBA and IT service provider Acturis, reveals the rate of reduction is slowing, with the past two quarters displaying a lower than 1% drop.

In the small and microbusiness sectors, premium reductions are still approaching double figures.

“This shows the competitiveness of the market for small business insurance, and is obviously good news for often hard-pressed SMEs,” BIBA CEO Steve White said.

BIBA warns insurance costs will rise for all sectors as the insurance premium tax increases from 6% to 9.5% from November.

“The indices show that in many areas insurers’ margins are squeezed, and they will be unable to absorb this additional tax on premiums, amounting to a 58% tax increase that will be borne by their customers,” Mr Trudgill said.