March 14, 2025
2025 UK Insurance Market Outlook
The UK insurance market experienced increased competition throughout 2024, which in turn drove softening conditions in many areas. Insurers capitalized on strong financials and market capacity, a benefit to buyers. However, certain sectors continue to face challenges, prompting essential strategic engagement and robust risk management for optimal outcomes.
Key Takeaways
In 2024, robust financial performance among insurers, ambitious growth plans, and increased market capacity led to market softening.
Despite overall positive conditions across much of the UK market, sectors such as motor insurance and US-exposed liabilities faced distinct challenges because of claims inflation and complex risk environments.
Early engagement with brokers and insurers, a robust broking strategy, a well-defined insurer engagement plan, data and analytics, and the demonstration of robust risk management practices are vital for capitalizing on current market dynamics.
Market Conditions Overview
The UK insurance market exhibited a general softening throughout 2024, marked by increased competition and considerable capacity across many key insurance classes. This created an environment where pricing might reduce an average of 11 to 20 percent.
This shift was driven by strong insurer financial results, including solid underwriting and investment performance, coupled with greater capacity from both established and new market entrants. Aggressive growth targets among insurers led to a more buyer-friendly environment that is expected to persist throughout 2025.
While clients may experience ample capacity and flexible underwriting, certain areas, like motor and US-exposed liability risks, continued to face challenges in 2024.
“In the absence of any wider macroeconomic or geopolitical events, our expectations are that this momentum and buyer-friendly conditions will continue, if not accelerate through 2025.” – Josh Webb, Head of London Broking, Commercial Risk, United Kingdom
Property Current Conditions
The UK property insurance market experienced a largely positive trend in 2024, with robust competition and plentiful capacity collectively lowering premiums. Insurers are keen to expand their portfolios by taking larger shares of existing business and are open to underwriting new risks.
In 2024, the market saw rate reductions from 10 to 15 percent, which is expected to continue into 2025. While coverage expansion was limited, some insurers offered more extensive options when requested, making it worthwhile to pursue.
However, sectors like waste management, and accounts with recent losses or inadequate risk management, continued to face difficulties. Remarketing programs achieved better results by fostering competition among insurers.
Risk Managed / Major Multinational Corporate / Mid-Market
- Overall: Soft
- Pricing: -11 to -20%
- Capacity: Abundant
- Underwriting: Flexible
- Limits: Increased
- Deductibles: Flat
- Coverages: Stable
Outlook
The softening trend in the property market is anticipated to persist and may even accelerate through 2025, provided there are no major economic or catastrophic loss events. Positive treaty renewals and insurers’ ambitious growth plans for 2025 support this outlook. Clients may find opportunities to broaden their coverage limits at a neutral cost due to the competitive environment. Demonstration of strong risk management practices, including risk control measures and business continuity planning, remains crucial for clients seeking to differentiate themselves.
“We are seeing insurers push for larger shares on existing business, a clear sign of their aggressive growth targets. Remarketing strategies can be particularly effective in these conditions.” – Helen Bailey, Broking Director, Property, Commercial Risk, United Kingdom
Liability Current Conditions
The liability insurance market saw softer conditions in 2024. However, insurers remain cautious about risks with US exposures due to the deteriorating claims environment, characterized by rising litigation costs and ‘nuclear verdicts’. Risks with predominantly UK or European exposures and no US or complex products are experiencing rate reductions exceeding 20 percent. Insurers are also providing long-term deals, often for two to three years, with flatter rate reductions in subsequent years.
Risk Managed / Major Multinational Corporate / Mid-Market
- Overall: Soft
- Pricing: -11 to -25%
- Capacity: Abundant
- Underwriting: Flexible
- Limits: Increased
- Deductibles: Flat
- Coverages: Stable
Outlook
The softening cycle is expected to persist throughout 2025 and beyond, especially for less complex risks with minimal US exposure. Clients should focus on the timing and quality of submissions, effective client engagement strategies, and considering long-term deals to optimize renewal outcomes.
“The market is ripe for rate reductions, except when it comes to U.S. exposures, which remain under significant scrutiny due to the ongoing claims environment.” – Gabriel Field, Head of Casualty, Commercial Risk, United Kingdom
Motor Current Conditions
The motor insurance market continues to face challenges, with average rate increases of 5 to 10 percent across portfolios in 2024. Claims inflation, driven by rising repair costs, labor rates, and increased general damages, is the primary factor.
Risk Managed / Major Multinational Corporate / Mid-Market
- Overall: Moderate
- Pricing: +1 to +10%
- Capacity: Ample
- Underwriting: Prudent
- Limits: Flat
- Deductibles: Flat
- Coverages: Stable
Outlook
We expect insurers to carefully evaluate risk and underwrite accordingly. Increased competition is emerging in certain areas such as car and van business, relative to prevailing market conditions. Increased competition is emerging in certain areas such as car and van business, relative to prevailing market conditions. Clients should review program structures, enhance risk management controls and consider technology use, such as telematics and driver cameras, to demonstrate risk improvements.
“Claims inflation continues to challenge the motor market, but strategic adjustments and early engagement can help mitigate some of these pressures.” – Adam Richardson, Head of Motor, Commercial Risk, United Kingdom
Directors & Officers (D&O) Current Conditions
The D&O insurance market experienced significant rate reductions, averaging 10 to 15 percent in 2024, driven by competition for market share. Insurers monitor traditional exposures and emerging risks like sustainability, artificial intelligence (AI), and cyber threats. Insurers are also concerned about the impact of inflationary costs on claims.
Risk Managed / Major Multinational Corporate / Mid-Market
- Overall: Soft
- Pricing: -1 to -10%
- Capacity: Abundant
- Underwriting: Flexible
- Limits: Increased
- Deductibles: Flat
- Coverages: Broadening
Outlook
The buyer-friendly conditions in the D&O market are expected to persist through 2025, with the abundance of capacity supporting further rate reductions. Clients should engage early, present risks clearly, and align with suitable insurance partners.
“While rates continue to fall, insurers are acutely aware of emerging risks. Early engagement and clear risk articulation remain crucial.” – Tom Mole, Executive Director, D&O, Global Broking Centre, United Kingdom
Cyber Current Conditions
The cyber insurance market saw significant savings for clients in 2024 as the market softened. Although ransomware frequency continued to rise, ransomware payments declined by 35 percent year-over-year, indicating improved client preparedness.
Risk Managed / Major Multinational Corporate / Mid-Market
- Overall: Soft
- Pricing: -11 to -20%
- Capacity: Abundant
- Underwriting: Prudent
- Limits: Increased
- Deductibles: Reducing
- Coverages: Broadening
Outlook
The softening trend in the cyber market is expected to continue, though insurers will remain focused on systemic risks and emerging threats. Continuous engagement and robust controls are key.
“The cyber landscape is ever-evolving, and while premiums are down, systemic risk remains a concern. Continuous engagement and robust controls are key.” – Nathan Hankin, Head of Retail Cyber and Tech E&O, Commercial Risk, United Kingdom
Market Dynamics: Trends Driving Conditions
- Insurer Financial Performance: Positive financial performance significantly influenced the UK insurance market in 2024, leading to more competitive pricing.
- Increased Capacity and Competition: Existing insurers and new entrants have increased market capacity, fostering competition and more favorable terms for buyers.
- Growth Targets: Insurers’ aggressive growth targets drive a dynamic market environment with flexible terms.
- Reinsurance Market Stability: Improved reinsurance conditions supported pricing and availability.
- Technological Advancements and Risk Analytics: Advanced risk analytics provide deeper insights into risk profiles, facilitating tailored insurance solutions.
- Geopolitical and Macroeconomic Factors: Insurers continue to monitor uncertainties, such as inflation and regulatory changes, which could impact risk exposures and claims costs.
- Emerging Risks and Innovation: The market is focused on emerging risks, such as those associated with sustainability and AI, which are driving product innovation.
5 Tips for a Successful Renewal
- Engage with brokers early to develop a robust multi-line renewal strategy.
- Establish and communicate clear objectives and priorities to insurers.
- Leverage data and analytics.
- Implement robust risk management practices.
- Maintain strong insurer relationships.
