Over the past two years, many insurers have reduced exposure to under-25 drivers.
The rationale appeared clear. Claims volatility increased, regulatory reform narrowed pricing flexibility, premiums spiked, telematics became dominant, switching peaked and then fell.
For many, this confirmed a simple narrative: the segment is high risk, commercially unstable and not worth the capital.
Our analysis suggests that conclusion may no longer reflect market reality.
The structural shift in the under-25 market began on the supply side. Competitive capacity contracted. Traditional products withdrew from the most price-sensitive positions. Telematics concentration increased. Only after those changes did consumer behaviour begin to adjust.
Renewal shopping fell in 2025 not because young drivers disengaged, but because renewal premiums stabilised and new business prices declined. When the gap between staying and switching narrows, behaviour rationally changes.
At the same time, deeper forces are reshaping the segment:
Insurance purchasing is frequently mediated by households rather than individuals.
Fronting and multi-driver policies blur traditional underwriting assumptions.
Payment behaviour has shifted materially toward annual funding, often supported by short-term credit.
Telematics participation is concentrated among a small number of providers.
Lower switching increases the strategic importance of early acquisition and lifetime value.
Under-25s remain aspirational and engaged. However, entry into the market is slower, funding is more complex and risk is increasingly shaped by household economics as much as individual driving behaviour.
For insurers that stepped back during the period of extreme volatility, the critical question is no longer whether the segment is risky. It is whether continued caution reflects current data or past experience.
Misreading structural change can create two equally costly outcomes: re-entering reactively without visibility, or avoiding an underserved segment that now requires disciplined participation rather than withdrawal.
Our latest report draws on our insights across our data sets to provide a full assessment of the segment.
If your organisation is reconsidering its appetite, acquisition strategy or lifetime value assumptions within motor, this analysis provides the clarity required to make that decision with confidence.