United Kingdom (UK) Professional Indemnity Insurance Market Dynamics, Trends, Opportunities and Future Market, 2024 Update

UK Professional Indemnity Insurance Market Report Overview

The UK professional indemnity insurance (PII) market was worth GBP3.3 billion in 2023. With improved profitability, capacity is returning to the market, both in the form of new entrants and existing insurers which have ambitious growth targets. Premium rates are therefore now stable or declining and market growth is forecast to be much slower by 2028. However, market conditions remain very profession-specific and are affected by the size and profile of risk. Professional indemnity underwriters also continue to traverse significant economic uncertainties and forces that could have a significant impact on the future course of the market.

The UK Professional Indemnity Insurance Market Research report provides detailed historical and forecast period data of the UK professional indemnity insurance market, along with sector-specific drivers. This report offers a detailed analysis of the market with the impact of shifting market conditions on SME switching and renewal behaviors, and the factors most important to SMEs when selecting or switching providers.  The report identifies the key distribution trends in the UK PII market.

UK PII Market Dynamics

Between 2024 and 2028, the UK PII space is forecast to grow at a slower rate than in recent years, as the market continues to soften. As competition grows, it will be increasingly difficult to make a profit in traditional professions. Underwriters will need to be selective and careful in their approach to avoid a return to the unsustainable rating of the last soft market. It will be imperative for insurers to have a clear understanding of the profitable sub-segments within their portfolios. The strength of their digital platforms and their broker relationships will also be key.

Moreover, the increasing intensity of competition is leading to higher levels of switching and fiercer competition for new business. Professional indemnity insurers should bolster their propositions, looking at packaging opportunities and the potential for risk management and other added-value services. They should also identify new product opportunities created by changes in legislation or regulation.

Buy the Full Report for More Insights into the UK PII Market Outlook, Download a Free Report Sample

UK PII Market Segmentation by Sectors

Legal services are among the biggest buyers of PII. Research published by the Solicitors Regulation Authority and the Legal Services Board in October 2023 revealed that the PII premiums paid by law firms were typically between 3% and 9% of their annual turnover. Smaller firms typically pay a higher proportion, making up 90% of firms paying more than 10% of turnover. There is increasing appetite among existing players, with most leading participating insurers seeking to actively grow their portfolios. There were also two significant new entrants to the solicitors PII market during the latter part of 2023: Howden’s new facility backed by Lloyd’s insurers and Fortegra.

The construction sector witnessed the most notable changes in 2023. One notable change, reflecting growing appetite in the market, is the renewed availability of cladding and fire safety cover for the majority of firms.

UK PII Market Analysis by Sectors, 2023 (%)

Buy the Full Report for More Sector-Specific Insights into the UK PII Market, Download a Free Report Sample

UK PII Market Segmentation by Distribution Channels

As professional indemnity can be a reasonably complex and specialist product, brokers account for the largest share of PII distribution accounting for more than 37% of policyholders in 2023. The ‘others’ category, contains organizations that play an important role in PII distribution such as trade associations.

UK PII Market Analysis by Distribution Channels, 2023 (%)

Buy the Full Report for More Sector-Specific Insights into the UK PII Market, Download a Free Report Sample

UK PII Market – Competitive Landscape

Within each of the major professions, insurers have differing market shares and presence. Over the years the UK’s major professional indemnity insurers have all made different decisions about their appetites for risk in certain sectors, with some choosing not to underwrite in the independent financial advisor, conveyancing, or construction sectors, for example.

 AXA is the market leader, both in terms of policyholder market share and when weighted based on SME turnover, which provides a greater indication of GWP market share. Aviva and Zurich continue to battle it out for second place in the UK PII market.

UK PII Market Analysis by Leading Companies

Buy the Full Report for More Information on the Leading Companies in the UK PII Market, Download a Free Report Sample

Segments Covered in the Report

UK Professional Indemnity Insurance Market Sector Outlook 

• Solicitors
• Construction
• Surveyors
• Managing General Agents (MGAs)
• Direct Propositions
• Specialists

UK Professional Indemnity Insurance Market Distribution Channels Outlook 

• Brokers
• Direct Channels
• Banks
• PCW

Scope

• The UK PII market was worth GBP3.3 billion in 2023, with slower growth of 3.1% driven by changing market dynamics, counterbalanced by growth in turnover among traditional professions.

• PII penetration rates are recovering after a slight dip in the wake of COVID-19 pressures and the peak of the hard market, particularly among sole traders, micro enterprises, and those not providing professional advice.

• However, SMEs are re-evaluating their PII holdings as a result of cost pressures; a quarter of medium-sized companies and 16.3% of small companies are currently considering or have considered canceling their PII policy.

Key Highlights

• We estimate the UK PII market to be worth £2.9 billion in 2021, with growth driven by premium rate rises across most market sectors. While premium adjustments will continue during 2022, it is expected that by the end of the year flatter rates will return.
• PII penetration rates have fallen among micro-enterprises and those not providing professional advice, as coronavirus pressures mean SMEs are re-evaluating their insurance holdings.
• Professional indemnity insurers are already dealing with coronavirus-linked claims. While many SMEs have made a successful claim on their PII policy as a result of the COVID-19 pandemic, the figures suggest that many claims are rejected as well.
• AXA is the SME market leader, while Hiscox and Tokio Marine HCC are the most favored insurers among brokers for PII placement.

Reasons to Buy

• Understand the current and forecast size and growth of the UK professional indemnity insurance market, along with sector-specific drivers.
• Gain insight into the effect of volatile market conditions on SME switching and renewal behaviors.
• Discover the SME market shares of the leading professional indemnity insurers and understand broker preferences.
• Learn about key distribution trends in the market.