As of the second half of 2025, the United Kingdom’s insurance market continues to favour buyers. According to Aon’s Q3 2025 Market Outlook, ample underwriting capacity is driving continued softening in pricing across most lines of coverage, creating a favourable negotiating environment for insurance purchasers.

The report indicates that the market overall displays clear "soft market" characteristics. In the third quarter, insurance premiums broadly declined by 11% to 20%. Concurrently, policy limits have increased, coverage terms have broadened, and deductibles have remained stable for most business types. This trend is underpinned by robust capital levels within the insurance sector, fostering intense competition among insurers for quality business.

This, however, does not signal a relaxation in underwriting standards. Aon emphasises that insurers have not lowered their underwriting criteria; instead, they are placing greater emphasis on the quality of risk information. Consequently, insureds who can provide high-quality risk data and demonstrate robust risk management practices hold a distinct advantage during renewal negotiations, securing more favourable terms and pricing. Risk differentiation has become a priority for market participants.

Within this market context, corporate risk landscapes are also undergoing significant evolution. According to Aon's 2025 Global Risk Management Survey, cyberattacks or data breaches remain the top risk for UK businesses, while business interruption has risen to the second position. Economic slowdown, geopolitical volatility, and regulatory changes round out the top five. These evolving risks are reshaping coverage, pricing, capacity, and underwriting approaches for key lines of insurance.

Performance across specific insurance lines varies:

• Cyber Insurance: Despite claim frequency remaining at historically high levels, the severity of losses has been relatively moderated due to widespread corporate adoption of enhanced risk controls such as multi-factor authentication and backup testing. The market has thus stabilised, with rate reductions of 11% to 20%, in line with the broader market trend. However, significant uninsured exposure persists, meaning that well-known firms could face substantial unrecovered losses following a major attack.

• Directors and Officers (D&O) Liability: The market remained soft for most of 2025, with Q3 witnessing rate decreases of 5% to 15%. Abundant capacity allows buyers to secure improved terms and broader coverage. Nonetheless, signs of moderation are emerging, with rate declines narrowing to single digits. Notably, shareholder litigation and regulatory scrutiny are increasing around Environmental, Social, and Governance (ESG) disclosures related to climate and diversity.

• Motor Fleet Insurance: Rising repair costs, increasing vehicle technology complexity, and persistent supply chain challenges continue to drive up claim costs. However, fierce insurer competition has moderated average rate increases from the 5-10% seen earlier in 2025 to flat or approximately 5% increases by Q3. Fleets with strong loss records and clear risk management strategies are more likely to achieve flat or even double-digit rate decreases, while those with more challenging risk profiles may still face upward pricing pressure.

Looking ahead, Aon advises insurance buyers to leverage the favourable conditions to secure optimal coverage and limits where possible. Simultaneously, businesses are encouraged to proactively review and strengthen corporate governance processes, ESG disclosures, and cyber risk management frameworks. This preparation will enable them to clearly demonstrate enhanced risk control to insurers at renewal. While current conditions favour buyers, proactive risk management remains the cornerstone of securing stable, long-term coverage in a rapidly evolving risk environment.