Rates continue to decline in construction market

Rates are continuing to decline in the construction insurance market, according to specialist broker Miller’s latest half-yearly Construction London Market Update.

The report said that the market is expected to soften as more carriers enter and highlighted that insurers such as Arch and Markel plan to open construction books in the next six months.

It added that rates continue to decline, while growth targets remain a key concern for carriers that are entering or have recently entered the market.

“This situation puts pressure on insurers with established portfolios, as they must carefully balance maintaining their market share with the growth objectives of their competitors,” the report said.

However, it said that, despite these challenges, the market is relatively healthy and London market propositions “continue to be crucial for clients worldwide”.

”With minimum premiums starting to decrease, we anticipate a reduction in the ‘differential terms’ often imposed by subscription markets,” the report added.

”This should lead to a resurgence of ‘true’ following markets, where all carriers involved in a risk are generally aligned.”

Widening coverage

The report stated that insurers were increasingly willing to offer LEG3 coverage – which offers protection against consequential loss from non-physical damage – where previously some reluctance was seen.

The professional indemnity (PI) market within construction also performed well in the first half of 2025, with “ample insurer capacity and appetite fuelling competition and driving premiums down”.

Meanwhile, directors’ and officers’ (D&O) liability insurance saw rate drops in the first half of the year, though the report indicated that there were “signs that we may be nearing the bottom of this phase” and that “insurers are beginning to resist offering substantial discounts, showing more determination in maintaining their pricing structures”.

One exception to the increase in coverage readiness is natural catastrophe protection, with many insurers cautious about expanding their offering in a sector that has seen extensive losses in recent years.