2024 Professional Indemnity Outlook

With 2024 now well and truly underway, Servca’s forecast for the Professional Indemnity (PI) insurance market suggests it’s going to be a year of opportunity. We anticipate a broker-led market, marking a departure from the trends of the past two years where PI premiums and conditions were largely dictated by underwriters.


January 24, 2024

Wide angle photograph of Lloyds of London

Is the PI market finally starting to soften?

For those unfamiliar with the nuances of Professional Indemnity, it's crucial to note that in 2019, the market entered a hardening phase. The landscape saw a reduction in active insurers, diminished limit sizes, increased deductibles, and reduced coverage, all culminating in soaring premiums for clients based on the simple theory of supply and demand (demand was plenty, however insurance capacity supply was low).

What lies ahead in 2024?

Looking ahead to 2024, Servca envisions several key shifts and here's why:

Competitive Underwriting

We have seen competitive underwriting across most accounts over Q3 and Q4 of 2023, whereby underwriters often offer renewal terms ‘flat’ in a move to retain their book of business as the PI market flattens out and even softens in many cases.

A greater diversity of new market entrants

The market is witnessing a marked increase in underwriting capacity. This influx has given rise to the establishment of new (re)insurers, Lloyd’s syndicates and MGAs both within and outside the UK, entering the market and competing for their slice of market share.

Growing Lloyd's of London capacity

Lloyd's of London capacity increase has contributed to the positive market shift. In 2020 the marketplace was affected by several ‘black-swan’ events (namely COVID-19 and Business Interruption claims) that caught most insurers off-guard. As a result, in 2021, Lloyd's of London tightened their underwriting bandwidth, resulting in an excellent year of profit in the market, followed by an excellent 2022 and 2023. This resulted in syndicate targets and budgets increasing, providing the insured and brokers with a competitive marketplace.

Specialist Coverage

Coverage in crucial areas like Fire Safety and Cladding is on an upward trajectory. Rectification cover is becoming a common offering, accompanied by broader sub-limits and backdated retroactive dates. Basements are now being covered more comprehensively, with sub-limits aligned with client needs.

Mergers and Acquisitions

The current global climate, especially within the insurance industry, is seeing an increase in mergers and acquisitions. While wholesalers may face challenges retaining business, smaller brokers benefit from maintaining their independence, particularly those partnered with independent Lloyd's brokers.

How to navigate these conditions?

Put rather simply, one could argue that now much ‘navigation’ is needed. Plentiful insurance capacity, competitive rates, broad coverages – what could possibly go wrong?!

Interestingly, the insurance markets operates through economic cycles of supply and demand. Where there is too much supply, insurers will either compete for the more challenging risks (higher risks) or exit the market in favour of putting their capital to work elsewhere.

Therefore, it is imperative to work with insurers and specialty brokers who have a sound understanding of risk placement and co-insurance. Why Servca for your PI risk placements?

Deep negotiation expertise

Leveraging strong market relationships, we negotiate innovative and competitive terms during both new business acquisition and renewals, ensuring our brokers-clients secure and retain their accounts.

Elite Market Awareness

Our well-connected team stays on top of market trends, changes, and new entrants, providing you with timely insights based on our access to Lloyd’s of London, London International Insurance Broker Association, and our wealth of in-house data-points, we ensure we stay ahead of the curve.

Continuous Product Innovation

We continuously develop new products and facilities, providing you with the tools needed to strengthen your position in the market.

Competitive Edge

Through thorough market exercises undertaken at renewal and our team's expertise, we equip you with a competitive edge to withstand challenges and competition.

Our Broker-Client Journey

Everything we do, begins, and ends with you – our valued broker-client. We prioritise communication during the broking placement stage, providing updates to clients and ensuring a seamless servicing process. Quick turnarounds on quotes and documents, coupled with a personalized service, define our commitment to efficiency.

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