United Kingdom (UK) Professional Indemnity Insurance Market 2024
Summary
This report provides in-depth analysis of the UK professional indemnity insurance market. It looks at market size as well as changes in premiums, claims, distribution, regulation, and future opportunities, including our proprietary GWP forecasts and the impact of COVID-19. The report uses results from our annual UK SME Insurance and UK Commercial Insurance Broker Surveys, as well as additional in-depth interviews with industry leaders.
Following an intense period of market correction, growth in the UK professional indemnity insurance (PII) market stabilized to 3.1% in 2023. With improved profitability, capacity is returning to the market, both in the form of new entrants and existing insurers with renewed appetite—some of which have ambitious growth targets. Premium rates are therefore now stable or declining and market growth is forecast to be much slower to 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.
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.
- Understand the current and forecast size and growth of the UK professional indemnity insurance market, along with sector-specific drivers.
- Gain insight into how shifting market conditions have affected 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.
- Executive Summary
- Market overview
- Key findings
- Critical success factors
- Market Dynamics
- Traditional professions account for 75–80% of GWP
- PII market growth stabilized in 2023
- Sector-specific forces still dominate different professions
- SME penetration rates are recovering but cost pressures are impacting product holding
- While profitability has been restored, claims inflation remains challenging
- Competitive Landscape
- Capacity and appetite are returning to the market
- The leading insurers differ by sector
- AXA is the SME PII market leader
- Tokio Marine, Markel, and Hiscox are broker market leaders
- Distribution
- SMEs use a variety of distribution channels for PII
- Switching has increased as competition returns
- Future of the Market
- UK PII market growth will be impacted by softening conditions
- Economic uncertainties for the PII market
- Additional forces that could impact PII market performance
- Appendix
- Abbreviations, acronyms, and initialisms
- Methodology
- Definitions
- Secondary sources
- Further reading
- About GlobalData
- Contact Us
- List of Tables
- Table 1: Impact of cost pressures on PII policyholding considerations among SMEs, 2023
- Table 2: Examples of new entrants and additional capacity in the UK PII market, 2023
- Table 3: UK PII SME market shares by sector, 2023
- Table 4: Method most recently used by SMEs to purchase PII by size of SME, 2023
- Table 5: Length of time SMEs have been with their PII provider, 2023
- Table 6: PII switching levels and behavior at last renewal by size of SME, 2023
- Table 7: UK PII GWP, 2019–28f
- Table 8: Economic indicators that will impact the future of the PII market
- Table 9: Risks that could influence the future direction of the PII market
- List of Figures
- Figure 1: PII market GWP is stabilizing, following significant hard market growth
- Figure 2: PII penetration levels have shown signs of recovery in some SME sectors
- Figure 3: Sole traders and micro enterprises are increasingly purchasing PII as part of a package
- Figure 4: SMEs are re-evaluating their PII holdings as a result of cost pressures
- Figure 5: AXA is the leading SME professional indemnity insurer
- Figure 6: Hiscox has a particular focus on micro enterprises and sole traders
- Figure 7: Tokio Marine, Markel, and Hiscox lead the way for PII among commercial brokers
- Figure 8: Brokers are the main channel used by SMEs to purchase PII
- Figure 9: The internet is used by the majority of SMEs for PII
- Figure 10: Almost four in 10 SMEs have been with their PII provider for less than three years
- Figure 11: PII switching levels have increased among SMEs
- Figure 12: Price and added risk management services are increasingly important drivers of switching among SMEs
- Figure 13: Around three in 10 SMEs with PII would like risk management services from their insurance provider but are not currently receiving them
- Figure 14: UK PII GWP growth is set to stabilize to 2028
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