United Kingdom

Market Review March 2020

Just as the market starts to harden, I’m off!

This will be my last market review, as I am due to retire at the end of March 2020, so it’s likely that by the time you read this I will be in a remote part of Wales, learning how to live the slow life.

I should like to thank everyone with whom I have had dealings over the past 49 years and wish everyone well.

Property insurance

Generally, rates are being maintained across the property spectrum, but many more questions are being posed on the type of construction, the management of unoccupied properties and general security. This follows the Grenfell Tower fire and is to be expected. If you do not provide full details, you may well see premium increases or restricted terms.

There are still plenty of insurers happy to compete for business, but some insurers such as Tokio Marine and MS Amlin have withdrawn from the market.

There is no doubt that property insurance premiums are still too low for a sustainable picture and this will change in 2020/2021, especially with the latest bout of floods.

Motor insurance

Motor accounts can deteriorate very quickly without good risk management, so attention must be paid to your fleet risks.

Generally, the market is still buoyant for non-blue light risks in the public sector.

Some insurers are attempting to link certain classes such as motor with liability or property with liability, to try to balance their books. However, I do feel that the motor market will eventually follow the liability market and become gradually more difficult.

Liability issues

Competition in the liability market is still reasonable, although some insurers are reviewing their underwriting book overall and finding that it has become too heavily weighted towards liability business. As a result, some insurers are either

not quoting; offering premiums that are much too expensive; or attempting to link liability with other risks where there might be less risk. This is tending to lead to increased terms and in some cases breaches of LTA.

Professional indemnity remains a very difficult market. Mainly, this has been caused by consultants and main contractors buying much higher limits because of Grenfell. This is leading to higher premiums and less capacity for the lower limits and the rating increases are also being seen in the D&O market.

Discount rate decision

The announcement of a worse than expected result – -0.25% rather than between 0% and 1% as was anticipated – has sent insurers back to their risk financing models and we are seeing further rate increases as a result. Increases between 5% and 20% have been seen in April 2020 renewals and some increased rates are already being seen in tender submissions.

Hard market and changes in 2019/2020

It has been very apparent that those clients who managed to get their tenders out before Christmas have had much better returns than those that waited until January- or in some cases February! It has once again proved that an early tender gets the better results!

LGA Mutual

It appears that the LGA Mutual is “open for business” but we have not yet seen any authorities obtaining underwriting terms.

Police and fire risks

There is absolutely no doubt that blue light risks have suffered in the last few months. Rates have increased and insurer participation in tenders has reduced. With fewer insurers in the market for liability and motor business in the blue light sector we are experiencing very severe increases in some cases. It could be said that these risks are “top end” as far as the insurance market is concerned, so perhaps we shouldn’t be too surprised.


With business interruption cover, we know that some insurers specify the diseases covered by the policy, and many are not granting cover for COVID-19.

Other policies cover all diseases which are “notifiable” to HM Government, which included COVID-19 from 5 March 2020.

This means it might be covered under those policies with a “notifiable” clause. However, some insurers stipulate that no additions are allowed without their approval in writing. There will also be an inner limit applicable to the section involved, and the “disease” needs to have occurred on the premises. Thus, a threat of an outbreak, or the presence of the disease in the area is not sufficient to trigger the cover.

We have also found that most school journey insurers are prepared to consider claims for cancellation due to government action or because venues are closing.

In both cases, we suggest you obtain a definitive view from your insurers and/ or brokers.


The market is hardening after many years of premiums reducing and the coming 24 months will see significant increases across the board as well as some insurers reducing their capacity in property and liability classes and particularly professional indemnity.

So, I bid you all a fond farewell and leave you in the capable hands of my colleagues at Aon.