Aon expects further softening in 'buyer-friendly' UK commercial market

By Rebecca Delaney

July 4 - (The Insurer) - Softening in the UK insurance market is expected to continue, at least in the short term, Aon said on Friday, with a potential accelerated second half softening in property and professional indemnity.

Aon's UK outlook described the market as "unchanged and buyer-friendly" as softening seen in the second half of 2024 has continued into this year. In the year to date, capacity has remained ample, with more flexibility in underwriting as limits have increased, deductibles have remained flat, and coverage broadened.

The UK insurance market saw price reductions across most lines by an average of 11% to 20%, although motor remains an outlier.

Aon said that UK professional indemnity saw continued general softening in the first half, with rates falling by 5% to 15% for major multinationals and 10% to 20% for the corporate mid-market segment. This was driven by increased insurer competition, with increased available capacity promoting insurers to offer larger shares of risks, Aon said.

Soft conditions have also continued in property insurance, with pricing down between 11% to 20%. In some cases, Aon said that rates are heading towards pre-hard market conditions.

Aon said property market capacity was plentiful, which has also led to a slight broadening of coverage across property business, with long-term agreements, cancellation and rewrite options common.

“If any of your covers were removed or reduced during the hard market, think about requesting them back. It is a highly competitive environment, and insurers are looking to try to differentiate themselves with the cover they offer”, said Helen Bailey, broking director, property, Commercial Risk at Aon UK.

Motor fleet rates continued to rise in Q1 2025, although this was at a slower pace than earlier in the year.

Claims inflation remains the major challenge, with rising costs across vehicle repairs, parts, and labour costs. Aon added that while there are indications that claims inflation is starting to moderate, wider geopolitical issues may continue to impact supply chains.

Increased competition in motor fleet is likely to continue into the next quarter, Aon said, with well risk-managed fleets and those that have not been to market in recent years potentially benefitting from better renewal outcomes as insurers show signs of widening appetites.