Spring Statement 2025: What insurers should know

Branded by the Conservative Party as an “Emergency Budget,” Reeves stuck to her promise of just one fiscal event a year and didn’t introduce any tax changes in her Statement, but she did outline key policies that will have an impact on the insurance industry.

Here are four key takeaways from the Spring Statement for insurers.

1. Construction spend

The 48-page Spring Statement confirmed the government will invest £13bn more in capital infrastructure over the next five years, launch a construction skills package to train up to 60,000 more skilled workers, and spend £2bn more on constructing social and affordable housing.

The Office for Budget Responsibility estimated the government’s planning reforms, which include allowing development on “low-quality grey belt” land, will result in 170,000 additional homes being built, boosting GDP by 0.2% by 2029 to 2030 and adding £6.8bn to the economy.

By 2034–35, this figure is expected to rise to 0.4%.

For property and construction insurers, this investment could bring new business opportunities but also increased risk exposure unless Labour’s new planning framework is changed to ensure flood- and fire-resilient properties are built.

Allison Whittington, head of housing and health at Zurich Municipal, urged the government to ensure any new development in flood-prone areas is avoided unless properties have sufficient design features, such as sustainable drainage systems, "so that homeowners don’t experience issues in years to come."

2. Boost for insurtech

The Spring Statement promised the government will work closely with the world’s leading artificial intelligence companies, Britain’s world-leading academics and entrepreneurs, and talented individuals keen to start up and scale up their businesses in the UK.

The government also outlined plans to develop the Oxford–Cambridge Growth Corridor, which Reeves argued could add up to £78bn to the economy by 2035.

At first glance, this sounds promising, but it falls far short of what the sector's trade body Insurtech UK has stated is required to make the UK a place where founders can flourish and want to set up permanent shop.

The UK government claims it wants to be the best place to start and grow a business, yet insurtech founders continue to struggle with funding constraints, overregulation, and a lack of targeted support.

However, the government promised it will engage with “key stakeholders” next month on how changes to tax reliefs such as the Enterprise Management Incentives Scheme, the Enterprise Investment Scheme and the Venture Capital Trust Scheme could help insurtechs thrive here.

3. Cutting red tape

For those fed up with compliance, Reeves once again promised to cut the administrative costs of regulation on business by 25% by the end of the Parliament.

She also stated watchdogs must support competition plus encourage new investment, innovation, and growth.

If Reeves is true to her word, and manages to slash regulatory administration costs by 25%, this would massively reduce the operational costs of compliance for insurers, freeing up resources for innovation and customer service plus potentially allowing providers to pass on the saving to consumers with cheaper policies.

If the Financial Conduct Authority and Prudential Regulation Authority streamline processes, insurers like Aviva and Direct Line may also be able to complete mergers more swiftly than the likes of Markerstudy and Ardonagh did last year, and be able to get new products to market more quickly.

But, as flagged by consumer group and ratings agency Fairer Finance, if regulatory oversight is loosened too much, there is a risk of weaker consumer protections, leading to an uptick in complaints and reputational damage to the industry.

4. Bumps in the road

For those fed up of potholes, the Spring Statement committed £4.8bn to the strategic road network in 2025 to 2026.

The funding included £1.3bn for “road renewals,” which, alongside the £1.6 billion for local road maintenance, Reeves noted represented “a record level of spending on fixing the road network.”

In theory, this could lead to fewer motor insurance claims related to vehicle damage from potholes and fewer claims for personal injury.

But, in the short term, roadworks and temporary detours could increase accident claims as drivers navigate new hazards and delays.

Smoother roads may not necessarily boost insurers’ bottom lines in the way many would hope in the short term.