The UK insurance market experienced a shift in 2025, with property, casualty, and financial lines seeing notable rate declines, while motor insurance remained an exception. Property insurance rates dropped 4% due to strong insurer competition and expanded capacity. Clients who engaged insurers early secured better pricing. Despite a challenging renewal season following major storms, insurers aggressively pursued retention strategies and offered long-term agreements. Cyber clauses remained a focal point in policy discussions.
Insurance rates in the UK declined 5% in the fourth quarter of 2024. UK insurance market will poised for a dynamic phase, influenced by economic recovery, regulatory changes, technological advancements, and evolving consumer needs.
The Global Insurance Market Index is proprietary measure of commercial insurance rate changes at renewal. Below are insights into the United Kingdom insurance market. Beinsure analyzed the Marsh’s report and highlighted the key points.
Casualty insurance rates declined 1%, with a sharper 6% drop excluding motor liability. General and employers’ liability saw increased capacity, but motor insurance rates rose 7%. The motor sector remained split, with rising rates in passenger transport but strong competition in private car and van fleets.
Financial and professional lines rates fell 8%, with directors and officers (D&O) liability rates declining between 5% and 10%. Cyber insurance rates also dropped 6% due to growing insurer participation and increased competition.
Key Highlights
- Property insurance rates fell 4% as insurers expanded capacity.
- Casualty rates declined 1%, with a 6% drop excluding motor liability.
- Motor insurance increased 7%, though competition remained strong in some segments.
- Financial and professional lines fell 8%, with D&O seeing 5–10% reductions.
- Cyber insurance declined 6% as market capacity expanded.
UK insurance market in 2025 involves considering various factors, including economic trends, regulatory changes, technological advancements, and emerging risks. Outlook for the UK insurance market suggests a landscape influenced by ongoing economic recovery, technological advancements, changing consumer behaviors, regulatory shifts, and a focus on sustainability.
After a challenging few years, insurers have begun to see signs of recovery in the private car market, which has led to an increase in demand for associated motor insurance. New car sales have been boosted by improved consumer sentiment and household spending due to falling inflation and rising real wages, as well as supply chain difficulties beginning to ease.
The ongoing digital transformation in the insurance industry is set to continue. Insurers will likely invest more in technology to enhance customer experience, streamline operations, and improve risk assessment.
UK composite insurance rate change
UK Property Insurance Rates Decline as Insurer Capacity Expands
Property insurance rates fell 4% as competition among insurers remained strong. Early engagement with insurers helped clients secure better pricing.
Several major storms affected the Caribbean and the U.S., creating a difficult renewal season. Secondary perils, including flooding in Dubai and California wildfires, may challenge insurers in 2025.
Property Insurance Rates Dynamics in the UK
Incumbent insurers aggressively retained clients, while new entrants expanded capacity. Many insurers offered long-term agreements (LTAs) to secure business and stabilize rates. Cyber clauses remained a critical issue in policy negotiations.
UK Casualty Insurance Rates Decline
Casualty insurance rates dropped 1%, with a steeper 6% decrease when excluding motor liability. Growth-focused insurers intensified competition, increasing capacity in general and employers’ liability, though caution remained regarding U.S. exposures. LTAs were frequently available (see Largest UK Car Insurance Companies).
The motor insurance market, however, saw a 7% rate increase, which may ease moving forward. The UK motor market’s loss ratio is expected to improve by 6% in 2024 due to lower claims costs after experiencing its worst performance in over a decade in 2023.
The sector remained divided, with steady rate increases in passenger transport while competition stayed high for private car and van fleets.
Casualty Insurance Rates Dynamics in the UK
Care inflation reached 25% due to provider shortages, driving up costs for individual injury claims. Insurers raised minimum excess levels on comprehensive policies.
The UK clients opted for higher retentions to lower premiums, pushing some insurers to seek new business. Maintaining accurate Motor Insurance Database (MID) records became essential to mitigate claims exposure from disposed vehicles.
Financial and Professional Lines Rates Decline, Led by D&O
Financial and professional lines rates fell 8%, with directors and officers (D&O) liability rates dropping between 5% and 10%. The UK D&O market remained well-supplied, fostering increased competition. However, fewer clients secured rate reductions compared to previous periods.
Capacity in the financial institution market remained abundant. The commercial crime market also experienced ample capacity, with insurers offering larger line sizes, broader terms, and lower retentions.
Cyber Insurance Rates Continue to Decline
Cyber insurance rates fell 6% as capacity continued to grow. New and incumbent insurers remained active, intensifying competition. Since late 2022, increased carrier participation has driven lower rates and broader coverage. Clients with annual revenues above £250 million typically saw the most significant rate reductions.
FAQ
Increased insurer competition and expanded capacity led to lower rates. Incumbent insurers aggressively retained clients, while new entrants entered the market, further driving down pricing.
Severe storms in the Caribbean and the U.S. created a challenging renewal season, as insurers reassessed risk exposure. Secondary perils like flooding in Dubai and California wildfires may add pressure in 2025.
General and employers’ liability saw increased competition, leading to a 1% decline in casualty rates, or 6% excluding motor liability. Motor insurance rose due to rising claims costs, but the trend may ease as loss ratios improve.
Ample capacity in the UK D&O and financial institution markets fueled competition, reducing rates. However, fewer clients secured rate reductions compared to previous periods.
More insurers entered the market, increasing competition. Since late 2022, greater capacity has led to lower rates and broader coverage, benefiting larger clients with revenues above £250 mn.
