Market conditions are expected to remain competitive as we move through the first half of 2025 building on the positive second half of 2024. Well-managed providers will continue to attract strong interest and competition from insurers.
H2 saw insurers looking for ways to retain clients where possible. As a result, not all accounts remarketed changed insurer despite competitive alternative terms. We saw the return of insurer willingness to cancel and rewrite existing Long Term Agreements (LTAs) as well as include rate stability deals.
Risk management bursaries are once again being offered to organisations with appealing and appetite-driven risk profiles for focused risk management initiatives.
Due to strong competition, we saw changes in retention levels, programme structure and new lead insurers with some well-run risks experiencing rate reductions as high as -25%. If risks weren't remarketed, organisations experienced flat to -5% rate increases on average.
Poor claims experience still drove rate increase on accounts.
Issues regarding damaged lithium batteries from equipment and vehicles concern underwriters and their reinsurers in both property and motor insurance classes.
The commercial property market continued to soften, with insurers more accommodating about the purchase of reinsurance to support increased capacity, reduced rating and removal of minimum premium levels to retain clients.
In many cases, programmes were restructured to stretch layers allowing for programme efficiencies and reduced total cost of risk.
Underwriters focus on the underlying business and its supply chain resilience was unchanged as well as the impact of inflation on property values. Insurers' expectation of realistic inflationary increases in values, as a result of a robust buildings valuation strategy, remained unchanged.
Competition remains strong, for well managed risks, with good claims experience and rate reductions of -25%.
Concern and uncertainty around the impact of climate change on natural disasters and weather events remains, heightened by further significant natural catastrophe (Natcat) events in 2024.
Clear and concise articulation around risk management approach remains a focal point and business continuity plans remain essential for delivering positive marketing results.
A clear broking strategy must be agreed, including early market engagement and informative market presentations, to stimulate competition and alleviate any barriers to drive optimal outcomes.
H2 2024 saw continued strong competition for well managed risks.
In line with H1 trends, we saw markets hungry for new business and incumbent insurers fighting hard to retain existing accounts when under competition (often reducing rates to do so).
All insurers were willing to consider cancel and rewrite of existing LTAs. Employers liability in isolation was +4% in Q3 which reflects certain accounts breaking LTAs with poor claims experiences.
The bigger reductions on casualty were because of existing LTAs being renegotiated or as package deals with property.
Overall capacity remains good, and competition is strong, with significant rate reductions achieved up to -30% for well-run risks. These are characterised by a positive attitude toward risk management, evidenced by targeted investment and limited claims experience.
We are starting to see insurers widen abuse coverage under Public Liability policies, with more now open to discussing a claims-occurring and non-aggregated basis, even for standalone abuse cover.
Insurers continue to ask more questions about the presence of Per and Poly-fluoroalkyl substances (PFAS) in products and supply chains, with PFAS exclusions becoming more common, especially in areas with known exposures such as chemicals and packaging.
Evidence of robust health and safety risk management remains key, as is the interrogation of claims to understand loss trends and demonstrate post-loss mitigation.
While H2 2024 saw rate increases in the motor market to reflect inflation, the overall outcome towards the end of the year was a more stable market, with only poorly performing fleets (those with poor claims experience) receiving significant increases. The average rate increase was +5%.
The issues affecting profitability and pricing continued in H2 2024 including:
While there is appetite to underwrite well-performing or significantly sized fleets, many insurers are still looking for +5% on well-run risks, with some insurers seeking up to +50% on provider fleets with poor claims experience.
Electric vehicles and new technology remain hot topics with insurers.
Claims cleansing and effective risk management remain essential for securing the most favourable terms at renewal.
H2 2024 we saw consistent capacity from insurers and improved conditions for well-managed risks, which are those able to evidence strong risk management and a positive claims experience.
It remains important to carefully review all terms and conditions offered by insurers to ensure they remain fit for purpose, particularly when considering a move to a new insurer.
Medical Malpractice coverage can sometimes be extended to cover abuse, which is more often found under a Public Liability policy. However, where available, cover remains limited.
Under the Civil Liability Act 2018, the Government is required to review the discount rates in England and Wales at least every five years. Following the 2024 Personal Injury Discount Rate (PIDR) review, the Lord Chancellor has determined the new rate to be +0.5%, effective from 11 January 2025, up from the previous rate of -0.25%.
The new rate means smaller lump payments by insurers to claimants than those calculated on the old rate reflecting an anticipated improvement in investment performance. This means that whilst the lump sum awarded may be lower, the value of it should grow more over time through investment.
The Medical Defence Organisations (MDOs) sector-led Code of Practice, aimed at enhancing transparency in the use of discretionary indemnity, now details decision-making processes for compensating patients and includes an escalation procedure with independent reviews for disputed claims. This code is now in effect and can be found on MDO websites.
This resulted from the UK Government’s 2020 Paterson Inquiry into doctors' discretionary cover for NHS and private work. The Department of Health and Social Care (DHSC) announced this in a statement issued in early 2024.
The DHSC also confirmed plans to reform the clinical negligence cover system, addressing issues such as cover for criminal acts or deviations from the terms of cover. We await any updates in this regard as of the time of writing.
For 2025, we anticipate rates will remain flat on average, with rate reductions of up to -5% available to providers who demonstrate convincing risk management leading to positive and/or improving claims experience when remarketed.
Expect lower lump sum compensation payments as a result of the PIDR rate increase.
The GB Directors’ and officers’ liability (D&O) market remains strong with the premium reductions and coverage improvements evidenced in H1 2024 continuing through the year.
H2 2024 saw insurers continue to offer greater capacity and flexibility over underwriting, including policy retentions, which continue to decrease for most providers.
WTW's 2024 Global Directors' and Officers' survey revealed that the top three risks concerning health and social care providers were health and safety, cyber-attack (including cyber extortion) and data loss, marking a shift from previous years. Additionally, the health and social care sector, unsurprisingly, ranks regulatory breaches highly, placing it at number five.
In 2025, we expect these positive conditions to continue, with most providers enjoying rate reductions of up to -5%.
Providing detailed underwriting information around governance, risk, and compliance controls remains essential to secure improved pricing.
H2 2024 continued the trend of exceptionally favourable conditions for health & social care providers in the cyber market, including:
This environment enabled cyber insurance buyers to secure increased policy limits, or those currently uninsured to consider coverage.
Insurers remained willing to offer higher policy limits and extend coverage, including risks like supply chain business interruption. They were also more open to providing quotes with less detailed underwriting information than in recent years.
Cyber maturity of health and social care providers, emphasising the adoption of key cybersecurity controls and processes, remained a focus for underwriters. This highlights the critical and ongoing need for regular cybersecurity training to enhance employee awareness and reduce human errors.
As capacity has flowed into the cyber insurance market consistently over the past 3 years, it seems reasonable to predict that capacity will remain plentiful in 2025.
Organisations with robust cyber security can look forward to continued pricing reductions, ranging from -10% to -30% depending on when they last remarketed. However, given the compound pricing reductions in recent years, we do expect insurers to do all they can to counter such further downward pressure, citing the volume and increasing value claims.
Systemic and supply chain risks look set to remain firmly intertwined in 2025. As a result, we expect the demand for coverage against such risks to be higher than ever this year. Due to the exposure this presents for insurers, there will likely be a strong push from major reinsurers to obtain more consistent underwriting metrics to further model portfolio-wide exposure.
The connection between global connectivity, supply chains and systemic risk remains as demonstrated in 2024. When issues arise, the impact has been and will be significant.
If 2025 sees even one significant event lasting more than a few hours, the impact on global enterprises could be substantial. This would leave providers' executive teams to justify their understanding of these risks and explain why they transferred as much or as little (or none) of this risk to the buyer-friendly cyber insurance market.
The GB Crime insurance market remains stable. Flat renewals with no rate increase were generally achievable for risks with good claims history and robust controls and procedures.
There was a continued focus on social engineering, fraud-related controls and processes. Insurers remain concerned about the ongoing and evolving threats of cybercrime, data breaches and ransomware attacks.
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The percentages have been presented as rounded figures for ease. All rate changes are for guidance only and are based on our observations and experience of the market for our WTW clients. Rates might vary depending on risk profile and individual circumstances.
