Briefing: Navigating a soft market – what’s next for UK brokers?

It is undoubtedly a buyers’ market. Increased insurance capacity and appetite, evident throughout 2024, has accelerated into the first half of 2025 – and shows little sign of slowing.

Depending on what source material you refer to, rates have fallen between 6% year-on-year and as much as 20% on certain lines.

Marsh’s Global Insurance Market Index, published in July this year, confirmed the trend, with UK composite insurance rates sliding steadily since their 2021 peak and falling faster through 2024 and into 2025.

The hardening market of the early 2020s was driven by a collection of events – extreme weather, Brexit and Covid-19’ impact on supply chain costs, such as materials and labour, as well as business interruption and cladding concerns with multioccupancy buildings, amongst others. Insurers responded by strengthening pricing

By 2024, the picture had shifted. Reinsurance rates, a weathervane for the insurance cycle, began to soften.

Aided by the impact of fewer extreme weather events, most insurers have published stronger results over the past two years. They now have both the reserves and confidence to compete aggressively, widening appetite and driving rates down more sharply than in previous soft cycles.

What, perhaps, is different now compared to a ‘normal’ insurance cycle is the rather sluggish growth in the UK economy.

Growth in 2022/23 was below 0.5% and some pessimistic forecasts for 2025 predict growth below 1%.

Add geopolitical uncertainty from Ukraine and US trade tariffs into the mix and the backdrop is far from supportive.

The result has been heightened competition, lower technical pricing and an influx of capacity, which is intensifying the downward push on premiums.

Implications for UK brokers

How long will the soft market last? That is difficult to predict, as it does rely on a number of factors.

Conversations with insurer chief executives at the Biba conference this year highlighted a general consensus. Even if pricing stabilises, it is likely to remain flat well into 2026 – and into 2027 unless unforeseen circumstances, such as extreme weather events, trigger a reversal.

Brokers continue to face upward pressure in their own cost bases. With renewal income no longer supported by underlying rate increases, and without the balance sheet reserves insurers are deploying to drive growth, brokers must find alternative ways to drive growth while also become more efficient to undertake the same level of activity at lower cost.

Obvious answers to this include driving more new business, increasing policies per client and becoming more efficient in dealing with each client.

While this all seems to be focused on results and not clients, there are real benefits to clients, client facing staff, brokers and insurers alike in driving this change.

Investment in good data, better technology and improvement in processes drive a slicker, easier client experience.

In a softer market there is the opportunity to improve clients’ limits and covers while still delivering a better price. Account executives and handlers should spend less time undertaking manual work that can be automated, focusing their important time instead on better client engagement as well as winning new clients.

Insurers, keen to fight for market share, are more likely to support brokers who can adjust to these market conditions.

However, investment comes at a cost, while brokers are feeling the squeeze from reduced rates and lower premiums.

Marshberry’s Q2 2025 earnings snapshot for major global brokerage firms indicated that most of the large global brokers are reporting around 5% organic growth.

For small to medium sized brokers, that level of organic growth leaves less headroom for investment to drive the changes necessary to deliver the higher rates of growth and efficiency needed in the current market.

And it’s not just the cost. Add the need for internal cultural buy in, in a relationship driven sector. The changes needed can not be completed overnight, especially when implemented properly.

Looking Forward

All of this does make me reflect on the journey the Clear Group has been on.

In January 2020, we were a 256 people retail broker, using five operating systems and relying heavily on spreadsheets.

Today, we are a 1,100 strong, multiline business across the UK and Ireland, including MGA and London market divisions, with much improved system driven data and stronger cross group support and cooperation.

Acquisition has been part of our growth story, but the real emphasis has been elsewhere. Building the organisation, strengthening structure and investing in people, technology and processes to operate more effectively at scale.

It has taken significant time, effort and investment, which all remains ongoing. There is still lots to do and the current market conditions that are likely to continue for the next two years or so only increase the need for that work to continue to be undertaken at pace.

That change is necessary, as commercial clients are now in a buyers market and expect to benefit. Delivering that benefit requires buy-in, good commercial discipline and strong leadership at all levels. Done well, it creates standout client experiences.

The softer market is here to stay for some time yet. Brokers either need to accept the current market as a challenge or embrace and invest in the changes needed to improve their service offering.

Those who invest in people, data, technology and efficiency will deliver stronger client outcomes today – and build resilience for tomorrow.