It has been another busy year at Momentum, which in turns means a busy year for you, our AR partners. As ever, you continue to deliver growth via a quality client base and we appreciate all of your hard work and celebrate your success in 2024.
As we move into the festive period and towards the end of another year, we have also transitioned into a soft market cycle for the majority of the classes of business where we facilitate placement. It will be an interesting year ahead when coupled with the current challenges that our commercial clients may feel when considering the current economic conditions.
Property
- Rating decreased in the UK market during quarters two and three for the first time since 2020.
- Insurers have considerable growth targets for 2025, we will see increased competition and more willingness to retain business from a rating perspective.
- In addition to the above, I suspect that we will see long term agreements being offered with level or reduced rates in future years as opposed to the increases that we have experienced over the last few years.
- This increased competition will still be focused on those risks which demonstrate excellent risk management.
- Residential blocks remain challenging for insurers from both a Construction and Escape of Water perspective.
- Inflation is slowing, which sees less indexation applied to properties, this being said concerns remain over the adequacy of buildings sums insured for both residential and commercial properties. We continue to recommend a valuation at least once every three years for a property and our partners at BCH can help with both desktop and site valuations.
Casualty
- The Liability market remains buoyant, Casualty rates have nudged forward during 2024, there is ample insurer competition
- Generally insurers have targeted retention of existing clients and been selective on new business opportunities. Several insurers are now offering wider policy coverage as the differentiator (over price) to help secure business.
- Insurers are also willing to consider longer term agreements on Liability business.
- There is more caution on both rate and capacity when reviewing Roofing and Scaffolding Contractors, along with those undertaking Piling and Basement Works.
- Whilst underwriters will consider North American exports and safety critical products, there will be a lower limit of indemnity provided.
- An overlap with Property, but when looking at Contractors business, I would comment that whilst capacity is available this can be occasionally pressured by the increasing frequency of large contract values of mega construction projects, especially when involving a timber structure.
Motor Fleet
- The Motor market is a little unknown as is stands looking at 2025, there is no certainty as to whether insurers will stick or twist when it comes to their rating ahead of 2025. There has been noise around insurers having the ability to apply greater discount at the start of 2025.
- The revised Ogden rate announced in the first week of December may assist, the Personal Injury discount rate has been adjusted from -0.25% to +0.5%. The change will become effective as of 11th January 2025, which may increase competition on the market.
- Competition still exists for well managed fleets and insurers are keen to engage with the customer to discuss their risk management offering to further improve performance.
- Claims handling continues to be a thorn in our side, insurers are aware of the wait times and we are advised that investment in claims handling personnel should see an uptake in service provided, albeit we don’t hold our breath.
Financial Lines & Cyber
Additional capacity has entered the market and is benefitting clients, many of whom have suffered since 2017.
- I really cannot help but feel that we are, as an industry, going to get ourselves back into a ‘mess’ when it comes to the placement of Financial Lines and Cyber coverage. Having been through the hard cycle where we experienced rate increases, reduced limits and higher excesses, we are now firmly back in a soft market.
- When looking at quarter three in 2024, according to the Global Insurance Market Index produced by Marsh, we are seeing rate reductions of up to 10% and 8% for Financial Lines and Cyber respectively, the market provided additional capacity and showed increased competition between insurers/MGAs.
- The same can be said of Cyber, there has been additional capacity deployed into the market continued from both incumbent and new insurers, we are seeing more competition on pricing and wider limits with some insurers now moving from an aggregate basis to an any one claim basis.
- Whilst clients will benefit in 2025, it will be interesting to see how sustainable the cycle can be- one for us to keep an eye on and perhaps educate our clients that this may not be a long term position.
We should still be cautious in respect of any higher risk professions and insurers still look to exclude Fire Safety Works, albeit some are now offering forms of rectification coverage, as opposed to blanket exclusion.
Personal Lines
- According to the ABI, their quarter three data suggests that claims for the first three quarters of 2024 reached a total of £4.1 billion – this is the largest amount paid in the first nine months of any year on record. The impact of this is increased premiums; the average price of Buildings and Contents insurance rose 3% in quarter 3 and more recent weather events (Storm Bert) in the final quarter of the year may only make this worse.
- The average premium for a Combined Policy increased 19% compared to the same period in 2023.
- It isn’t just weather events impacting the market, Subsidence claims were also up in quarter two of 2024, reaching over £60 million.
- Slightly better news on the Private Car front; the average Motor Insurance premium fell by 2% in April to June compared to the first quarter of 2024, according to the latest data from the Association of British Insurers (ABI).
- This being said, repair costs are still high and whilst the average cost of the theft of a vehicle dropped, the cost of theft from a vehicle rose.
What can you expect from us?
- Watch out for our webinar on 15th January 2025, in which a panel of our insurer partners and I will provide further insight into the 2025 marketplace.
- We as a business are looking to develop more exclusive products for our clients based on feedback received during the year.
- Webinar Wednesdays provide more market updates and product insight. As always do let us know if there is an area you would like us to cover off.
- More Momentum Roadshows to provide news of all things at Momentum.
I’d like to take this opportunity to thank all our AR Partners in helping us continue to be the market leading AR network, and of course, a big thank you to all of our Momentum colleagues, whose hard work throughout the year does not go unnoticed.
Enjoy some festive downtime and see you all in 2025.
