UK Insurance Market Outlook

UK Insurance Market Outlook
June 18, 2025 15 mins

UK Insurance Market Outlook

global-market-insights-gmi-overview

Against an increasingly turbulent macro-economic and geo-political landscape, the UK insurance market has remained unchanged and buyer-friendly in the first quarter of 2025. The softening witnessed across large swathes of the market in the second half of 2024, continued if not accelerated further.

Key Takeaways
  1. In Q1 2025, the insurance market continued to soften across most lines by an average of minus 11-20 percent, although motor is an outlier with rates still increasing marginally.
  2. During the course of Q1 coverage broadened as insurers chose to compete on policy terms.
  3. To get the best results, early engagement at renewal with brokers and insurers continues to be important, with the opportunity to broaden cover, restructure and take advantage of the competitive market.

Soft Market Conditions Drive Competitive UK Insurance Landscape

UK insurance market conditions softened across an increasing number of classes through the back end of 2024 and into Q1 2025. That trend has continued and even accelerated in certain areas with pricing reducing from minus 11-20 percent. Insurance capacity is ample, and there is more flexibility in underwriting. Limits have increased, while deductibles have remained flat, and coverage is broader across more lines as insurers look to differentiate themselves in a highly competitive environment. As a buyer-friendly, moderate insurance market, there is an opportunity for insureds to look at their overall approach in terms of risk strategy, assess the robustness of their strategy and explore opportunities such as increasing limits on their programmes or expanding cover so it is broader and bespoke to evolving needs.

Despite the competitive nature of the market, however, there's broader uncertainty and volatility globally, both from specific macroeconomic challenges such as trade tariffs and the wider geopolitical challenges. Insurance buyers should be mindful that these external factors could impact the insurance industry in the coming months.

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We see no reason why the current market conditions will not continue, certainly for the short term, and even accelerate and soften further in some areas as we go into the second half of this year.

Josh Webb
Head of London Broking, Commercial Risk, United Kingdom

UK Construction Insurance Sees Rate Drops and More Capacity in 2025

Current Conditions

In the construction ‘all-risks’ market (property-based cover, not liability), rates are generally trending downwards by as much as minus 20 percent for traditional four-walls construction, with ample capacity from existing carriers as well as from new markets. For complex engineering projects, however, pricing is flat and underwriters are being more prudent than they would be for traditional construction risks.

  Simple Four Walls Construction Complex Engineering Projects
Overall Soft Flat
Pricing -11 to -20% Flat
Capacity Ample Ample
Underwriting Flexible Prudent
Limits Increased Increased
Deductables Flat Flat
Coverages Broader Stable
Outlook

The new capacity coming into the market will be available for complex risks which could provide more competitive conditions for those risks. But risk management continues to be a key element for insurer consideration and certain areas must be well covered, such as having a water risk management process in place to get the right level of coverage needed. The advice for renewal continues to be to engage early and have those relationships with key partner insurers. Where there have been major claims or a series of similar losses, ensure it can be shown that lessons have been learned and working practices improved to make sure similar incidents can't happen again.

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There is a lot more flexibility from carriers around what they're prepared to do, whether it's looking at an extension of limits, or whether it's around deductibles.

Simon Simpson
Managing Director, Construction & Infrastructure, Commercial Risk, United Kingdom

Professional Indemnity Insurance: Rate Relief and Broader Coverage

Current Conditions

A general softening to the professional indemnity (PI) market has continued in 2025 with rates falling from minus 5-15 percent for major multinationals and from minus 10-20 percent for corporate/mid-market, driven by increased insurer competition. With the increase in available capacity, insurers are offering larger shares of risks and being far more competitive to win new business. For insureds, these favourable market conditions have led to enhanced terms with an expanding breadth of coverage and fewer exclusions.

  Risk Managed / Major Multinational Corporate / Mid-Market
Overall Soft Soft
Pricing -5 to -15% -10 to -20%
Capacity Abundant Abundant
Underwriting Flexible Flexible
Limits Increased Increased
Deductables Flat Decreased
Coverages Stable Broader
Outlook

Throughout 2025, the PI market in London especially is likely to remain highly competitive, with insurers aggressively chasing business. But while this will be the overall trend, rates are still profession dependent and certain professions are still seeing challenges. Some professions, for example, are continuing to be heavily loss making for insurers and these are only seeing flat rates or at least smaller rate decreases. All insurers are looking to see proactive risk management from their insureds, so it's important to be able to demonstrate and articulate that risk management procedures in place are sufficient. Meetings with existing and any potential new markets can be a great way to get that across.

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One of the most important aspects at renewal is to get the right balance between the cost, the cover and security to deliver long-term value, rather than just focusing on potential short-term savings.

Mike Pearson
Head of Financial Lines, Commercial Risk, United Kingdom

Motor Fleet Insurance: Rate Increases Slow as Competition Grows

Current Conditions

Motor fleet rates continued to rise in Q1; however, at a slower pace than seen earlier in the year. Claims inflation continues to be the major challenge with rising costs in vehicle repairs, parts and labour costs. There are however signs that claims inflation is starting to moderate; this view is balanced with the wider geopolitical issues that may continue to impact supply chains.

  Risk Managed / Major Multinational Corporate / Mid-Market
Overall Moderate Moderate
Pricing +2.5 to +7.5% +2.5 to +7.5%
Capacity Ample Ample
Underwriting Prudent Prudent
Limits Flat Flat
Deductables Flat Flat
Coverages Stable Stable
Outlook

Increased competition is likely to continue into the next quarter. Well risk managed fleets and those that haven’t been to market in recent years may benefit from better renewal outcomes, with expiring rates and savings still achievable for certain cases, whilst poor performing fleets and those in challenging sectors may continue to see more challenging conditions. Insurers are showing signs of widening their appetites and quoting risks and certain trades that were previously declined. A successful renewal continues to depend on the quality of risk management information and how risk management is used to influence and reduce claims frequency, together with a sufficient lead in time to allow adequate analysis of the claims and subsequent negotiation.

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Insurers are fighting a lot harder to retain clients compared to 12 months ago, focusing on both retaining their held book of business whilst trying to continue to meet their growth plans.

Adam Richardson
Head of Motor, Commercial Risk, United Kingdom

Liability Insurance in the UK: Rate Reductions and Insurer Flexibility

Current Conditions

Soft market conditions in liability have continued with rate decreases of between minus 11-20 percent on average for risk managed/major multinationals and between minus 11-25 percent for corporate and mid-market sized businesses. Insurers are aggressively looking for top-line growth which has resulted in those accounts achieving considerable rate reductions, with incumbent insurers willing to reduce rates to retain accounts. Offers of long-term agreements are now common and insurers are working hard to differentiate themselves, be it from a superior multinational offering or an enhanced service proposal. Insurer concern around US exposure remains, particularly around US auto.

  Risk Managed / Major Multinational Corporate / Mid-Market
Overall Soft Soft
Pricing -11 to -20% -11 to -25%
Capacity Ample Abundant
Underwriting Flexible Flexible
Limits Flat Increased
Deductables Flat Flat
Coverages Stable Stable
Outlook

For the rest of 2025 and into 2026, the soft market environment is likely to remain the same, with insurers focused on meeting their targets, partnered with a widening of risk appetite. Insureds planning for renewal should engage early. It’s key that businesses respond to all insurer questions as, despite the soft market, insurers still need to ensure that their underwriting guidelines and treaty requirements have been met; timely and comprehensive response to queries allows this.

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Soft market conditions continue at pace with no end in sight . We are encouraging our clients to take advantage and lock in where possible.

Gabriel Field
Head of Casualty, Commercial Risk, United Kingdom

Property Insurance Market Softens with Competitive Pricing and Broader Terms

Current Conditions

Soft conditions have continued in property with pricing down from between minus 11-20 percent and rates are heading towards pre-hard market conditions in some cases. The market has plenty of capacity which is not only leading to price reductions but also a slight broadening of coverage. Long-term agreements, cancel and rewrite options are common. Good market management is critical. Insureds should carefully consider best terms and conditions against long-term insurer partnerships.

  Risk Managed / Major Multinational Corporate / Mid-Market
Overall Soft Soft
Pricing -11 to -20% -11 to -20%
Capacity Abundant Abundant
Underwriting Flexible Flexible
Limits Increased Increased
Deductables Flat Flat
Coverages Broader Broader
Outlook

There are lots of aggressive growth targets out there for insurers and quite possibly not enough business to satisfy all of them, which means the competitive environment is likely to continue through the second half of the year. Some unknowns relate to the global tariff landscape which could impact supply chains, indemnity periods, and insurer investment returns. For renewal, chasing down the lowest price with specific insurers might not necessarily support some of the longer-term objectives in place with key partners; it's about insureds trying to find that balance between the two and working to future proof their programme. As ever, early engagement with insurers and quality renewal submissions with updated values are a must.

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If any of your covers were removed or reduced during the hard market, think about requesting them back. It is a highly competitive environment and insurers are looking to try to differentiate themselves with the cover they offer.

Helen Bailey
Broking Director, Property, Commercial Risk, United Kingdom

Healthy Insurer Results Driving Improved Conditions for Buyers

What is driving these general trends across most insurance lines?

Insurers have reported some strong full year results over the last few months, which is underpinning many of the changes in market conditions seen, particularly around pricing and increased capacity.

Tracking insurers’ combined ratios over the last 10 years illustrates why the market is moving the way it is. From 2017 to 2020, there was less profitability in the insurance sector with a sustained period of natural catastrophe losses hitting the whole industry. After a spike in 2020, there has been a general trend downwards in combined ratios to the point where, in terms of the latest results just released, many key insurers have reported underwriting profit.

Emerging insurer growth plans will be likely to further increase competiton and supply across the market, providing insureds with additional opportunities at least in the short term.

On-Demand: Quarterly Briefing: UK Insurance Market Insights

Join our UK Commercial Risk leaders as they deep dive into the latest developments in the UK risk environment.

Watch Webinar
Aon’s Thought Leaders
  • Josh Webb
    Head of London Broking, Commercial Risk, United Kingdom
  • Simon Simpson
    Managing Director, Construction & Infrastructure, Commercial Risk, United Kingdom
  • Mike Pearson
    Head of Financial Lines, Commercial Risk, United Kingdom
  • Adam Richardson
    Head of Motor, Commercial Risk, United Kingdom
  • Gabriel Field
    Head of Casualty, Commercial Risk, United Kingdom
  • Helen Bailey
    Broking Director, Property, Commercial Risk, United Kingdom

General Disclaimer

The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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