UK Insurance Market Outlook

UK Insurance Market Outlook
March 14, 2025 12 mins

UK Insurance Market Outlook

global-market-insights-gmi-overview

The UK insurance market has seen increased competition and softening conditions. Insurers have capitalized on strong financials and capacity, benefiting buyers. Yet, challenges in specific areas have required strategic engagement and robust risk management for optimal outcomes.

Key Takeaways
  1. In 2024, insurers' strong financial performances, the emergence of ambitious growth plans and increased capacity led to a softening market, and provided buyers with favorable terms and pricing.
  2. Despite overall positive conditions across large areas of the UK market, sectors like motor insurance and U.S.-exposed liabilities faced challenges in 2024 due to claims inflation and complex risk environments.
  3. Early engagement with brokers and insurers, a robust broking strategy, a clear insurer engagement plan, data and analytics and the demonstration of robust risk management practices are crucial for capitalizing on current market dynamics.

Market Conditions Overview

The UK insurance market exhibited a general softening throughout 2024. This transition has been characterized by increased competition and abundant capacity across many key classes of insurance, with the potential for average pricing reductions between 11 percent and 20 percent. Strong insurer financial results, including robust underwriting and investment performance, coupled with increased capacity from both established and new market entrants, were responsible for this shift.

Aggressive growth targets among insurers created a more buyer-friendly environment, which is expected to continue through 2025. The overall market “softened” with many clients experiencing ample capacity and flexible underwriting. However, certain areas, such as motor insurance and U.S.-exposed liability risks, continued to face challenges in 2024.

Quote icon

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, illustrated by robust competition and plentiful capacity, which have collectively driven down 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 ranging from 10 percent to 15 percent, and we expect this to continue into 2025.

While the broadening of coverage was limited, some insurers distinguished themselves by offering more extensive options when asked, so it is worth pursuing this. Nonetheless, sectors such as waste management, as well as accounts with recent losses or perceived inadequate risk management, continued to face challenges. Clients who engaged in remarketing their programs achieved better results by fostering competition among insurers.

  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 Stable 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 increase their coverage limits and breadth at a neutral cost due to the competitive environment.

Inflation and the necessity for updated property valuations may have urged clients to consider increased limit purchases in 2024, which insurers were generally willing to accommodate. Demonstrating strong risk management practices, including risk control measures and business continuity planning, will remain crucial for clients seeking to differentiate themselves. Engaging with insurers early, clearly articulating renewal objectives, and leveraging data and analytics will be essential to optimizing property program outcomes.

Quote icon

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 experienced softer conditions in 2024. However, insurers remain cautious about risks with U.S. exposures due to the deteriorating claims environment in the U.S., which is characterized by rising litigation costs and "nuclear verdicts."

Insurers maintained line sizes, with £25 million the common single limit, and up to £50 million through layered programs. Risks with predominantly UK or European exposures and no U.S. or complex products are witnessing rate reductions in excess of 20 percent. Additionally, insurers are offering 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 Soft
Pricing -1 to -10% -11 to -25%
Capacity Ample Abundant
Underwriting Prudent Flexible
Limits Flat Increased
Deductables Flat Flat
Coverages Stable Stable
Outlook

The softening cycle in the liability market is expected to continue throughout 2025 and beyond, particularly for less complex risks with minimal U.S. exposure.

Inflation remains a concern and will need to be evaluated on an ongoing basis, especially for long-tail liability clients. Clients should focus on the timing and quality of submissions, effective client engagement strategies and the consideration of long-term deals to optimize renewal outcomes.

Quote icon

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 percent to 10 percent across portfolios in 2024. Claims inflation, driven by rising repair costs, labor rates, credit hire challenges and increased general damages, is the primary factor behind these increases. The growing prevalence of electric vehicles has also contributed to higher claims costs, as repairs are more expensive compared to those for internal combustion engine vehicles.

  Risk Managed / Major Multinational Corporate / Mid-Market
Overall Moderate Moderate
Pricing +1 to +10% +1 to +10%
Capacity Ample Ample
Underwriting Prudent Prudent
Limits Flat Flat
Deductables Flat Flat
Coverages Stable Stable
Outlook

We expect insurers to carefully evaluate risk and will underwrite accordingly. Increased competition is emerging in certain areas, such as car and van business, relative to prevailing market conditions. The change in the personal injury discount rate (Ogden rate) from -0.25 percent to +0.5 percent is a positive development, reducing the cost of large claims. Clients should review program structures, enhance risk management controls and consider the use of technology, such as telematics and driver cameras, to demonstrate risk improvements.

Quote icon

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 percent to 15 percent in 2024, driven by competition for market share. Insurers are closely monitoring traditional exposures such as insolvency, regulatory compliance and financial mismanagement, as well as emerging risks like sustainability, artificial intelligence (AI) and cyber threats. Additionally, insurers are concerned about the impact of inflationary costs on claims, such as increased legal fees.

  Risk Managed / Major Multinational Corporate / Mid-Market
Overall Soft Soft
Pricing -1 to -10% -1 to -10%
Capacity Abundant Abundant
Underwriting Flexible Flexible
Limits Increased Increased
Deductables Flat Flat
Coverages Broadening 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. However, we anticipate insurers will remain vigilant about risk factors going forward.

Large claims or a surge in new business, such as an active mergers and acquisition environment, could influence insurer appetite. To drive a competitive renewal process, clients should engage early, present risks clearly and align with the most suitable insurance partners. Every insured presents its own set of risk factors.

Quote icon

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. Business interruption, including dependent business interruption, remains a key risk for businesses.

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

The softening trend in the cyber market is expected to continue, though insurers will remain focused on systemic risks, emerging threats like AI, and the impact of inflation on claims costs. Robust controls and information analytics will be crucial for clients to differentiate themselves and optimize renewal outcomes. Engagement with insurers, clear articulation of objectives and leveraging data-driven tools will be key to successful cyber program renewals.

Quote icon

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

1. Insurer Financial Performance

In 2024, positive insurer financial performance significantly influenced the UK insurance market's dynamics. For the second consecutive year, insurers are expected to report favorable underwriting results and robust investment returns. This financial stability has reinforced their willingness to offer more competitive pricing and a general expansion in appetite, contributing to the overall softening market conditions.

2. Increased Capacity and Competition

There has been a noticeable market capacity increase, driven by existing insurers looking to expand their position and new entrants eager to capture market share. This influx of capacity is leading to heightened competition among insurers across large swathes of the UK insurance market. As insurers vie for new business and retention of existing clients, this competition is translating into more favorable terms for buyers.

3. Growth Targets

Insurers are pursuing aggressive growth targets in response to their strengthened financial positions. This strategic push is resulting in a more dynamic market environment, where insurers are willing to offer more flexible terms to attract and retain clients. Growth ambitions are fostering a climate where buyers can benefit from enhanced negotiating power and broader coverage options.

4. Reinsurance Market Stability

The reinsurance market, which heavily influences direct insurance pricing and availability, showed signs of moderation and even softening in certain areas in 2024. Improved reinsurance conditions have been supported by positive financial results and growing capacity, mirroring trends in the direct insurance market. This enabled insurers to maintain or lower their pricing structures, further benefiting clients.

5. Technological Advancements and Risk Analytics

The integration of advanced risk analytics and technology is shaping market dynamics by providing insurers and brokers with deeper insights into risk profiles. Tools like Aon's Risk Analyzers for property, cyber and D&O are helping clients to better understand and manage their risks. These technological advancements can help facilitate more tailored insurance solutions and help foster a data-driven approach to underwriting, enhancing market efficiency and client outcomes.

6. Geopolitical and Macroeconomic Factors

While the market remains generally positive, insurers continue to monitor geopolitical tensions and macroeconomic uncertainties, such as inflation and regulatory changes, which could impact risk exposures and claims costs. These factors remain potential disruptors, requiring insurers and clients to stay agile and responsive to shifts in the broader economic landscape.

7. Emerging Risks and Innovation

The insurance market is increasingly focused on emerging risks, such as those associated with sustainability, AI and cyber threats. Insurers are innovating to address these evolving risks, offering new products and endorsements that cater to clients' changing needs. This innovation is key to maintaining relevance and competitiveness in a rapidly changing risk environment.

5 Tips for a Successful Renewal

  1. Engage with brokers early to develop a robust, multi-line renewal strategy.
  2. Ensure clear objectives and priorities are established and communicated to insurers.
  3. Leverage data and analytics to understand risk profiles and inform program design, and then differentiate it with insurers.
  4. Implement robust risk management practices and be prepared to articulate them.
  5. Maintain strong insurer relationships and execute a well-designed engagement plan.

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
  • Helen Bailey
    Broking Director, Property, Commercial Risk, United Kingdom
  • Gabriel Field
    Head of Casualty, Commercial Risk, United Kingdom
  • Adam Richardson
    Head of Motor, Commercial Risk, United Kingdom
  • Tom Mole
    Executive Director, D&O, Global Broking Centre, United Kingdom
  • Nathan Hankin
    Head of Retail Cyber and Tech E&O, 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. FP.AGRC.2025.340.GG

Terms of Use

The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

Aon Insights Series Asia

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series Pacific

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series UK

Expert Views on Today's Risk Capital and Human Capital Issues

Construction and Infrastructure

The construction industry is under pressure from interconnected risks and notable macroeconomic developments. Learn how your organization can benefit from construction insurance and risk management.

Cyber Labs

Stay in the loop on today's most pressing cyber security matters.

Cyber Resilience

Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.

Employee Wellbeing

Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.

Environmental, Social and Governance Insights

Explore Aon's latest environmental social and governance (ESG) insights.

Q4 2023 Global Insurance Market Insights

Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.

Regional Results

How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.

Human Capital Analytics

Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.

Insights for HR

Explore our hand-picked insights for human resources professionals.

Workforce

Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.

Mergers and Acquisitions

Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.

Navigating Volatility

How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?

Parametric Insurance

Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.

Pay Transparency and Equity

Our Pay Transparency and Equity collection gives you access to the latest insights from Aon's human capital team on topics ranging from pay equity to diversity, equity and inclusion. Contact us to learn how we can help your organization address these issues.

Property Risk Management

Forecasters are predicting an extremely active 2024 Atlantic hurricane season. Take measures to build resilience to mitigate risk for hurricane-prone properties.

Technology

Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.

Top 10 Global Risks

Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.

Trade

Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.

Weather

With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.

Workforce Resilience

Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.

More Like This

View All
View All
Subscribe CTA Banner