A new insurance market update report re/insurance broker Lockton, notes that the UK Property market has performed better for buyers in 2023 than originally expected due to insurers’ healthy risk appetite.
At the same time, high inflation, the elevated cost of catastrophe reinsurance, and tighter underwriting controls have threatened to send the market into a period of hardening rates, says the firm.
The expected outlook for the rest of the year and the beginning of 2024 for the UK property market is stable.
Factors like continued competition, insurer investment, the stabilising inflation environment, and comparatively benign weather have contributed to the broker’s outlook.
Lockton notes that a lot of carriers are keen to maintain their share in current risk portfolios, especially in businesses with controlled catastrophe exposure.
While the firm expects this trend to persist for the next four to six months, it warns that the volatility of the US wind season will influence the profitability of treaty reinsurers, potentially triggering a push for further restrictions in catastrophe terms.
As a result, insurers may pass these on to buyers, along with any potential increases in pricing for businesses of this risk profile.
