Underwriting discipline is holding in the UK fleet market, but pressure is building, and the real test may still lie ahead. After a sustained period of rate hardening, the key question is how long that discipline can hold if competition starts to return.
For Phil Cunningham (pictured), chief executive officer of Direct Commercial, that discipline is real, but more fragile than it may appear. Having worked through multiple market cycles, he points to structural changes that are limiting how far pricing can fall, even as conditions begin to shift.
Pricing discipline is largely holding, Cunningham said, although the market has softened over the past 12 months.
What has changed more materially is oversight. Capacity providers are applying greater scrutiny to MGAs, with less tolerance for underperformance and tighter expectations around profitability.
“There’s a hell of a lot more accountability now,” he said, adding that providers are more demanding and significantly less forgiving than in previous cycles.
That shift is being felt across the market. Many MGAs have “burned paper”, Cunningham said, with some no longer trading as a result of sustained underwriting losses.
The implications are clear: the margin for error is narrowing, and poor performance is quickly punished through the withdrawal of capacity.
This points to a more contained cycle, with structural constraints likely to limit how far pricing can fall or how long any downturn persists. It also places greater emphasis on insurer selection, as access to stable, long-term capacity becomes more critical than short-term pricing advantage.
Differentiation is shifting toward claims performance. Cunningham said pricing is fundamentally driven by claims cost but warned of a growing divide between insurers that manage claims in-house and those that outsource. That divide is becoming more important as firms look to protect margins and improve outcomes.
Delays in notification can significantly increase overall claim costs, particularly where third-party involvement escalates before insurers are engaged.
“If you were implementing these claim-notification tools late, you could be looking at a 20- to 30-day lag, and that would more than quadruple the cost of the claim,” he said.
That focus is also shaping client behaviour. Some policyholders are willing to pay more for certainty around claims handling and continuity of service, particularly at higher premium levels. This is shifting the conversation away from lowest price alone toward long-term performance and service delivery.
True underwriting discipline comes down to consistency, and that remains a challenge across the market.
“It never ceases to amaze me that one underwriter might be at £100,000 and another at £70,000,” Cunningham said, referring to the variation in pricing the same fleet risk.
Such disparities, he added, are more than just inefficient, they undermine the credibility of the market. “It’s embarrassing,” Cunningham said, describing the scale of pricing inconsistency across the market.
While technology and AI continue to reshape the sector, Cunningham said underwriting fundamentals remain decisive.
He pointed to tech-led entrants that introduced innovation but struggled to deliver sustainable underwriting performance, reinforcing the importance of balancing digital capability with experience. For established players, the focus is on execution - using technology to enhance, rather than replace, underwriting discipline.
“It’s great having all of that technology, but unless you’ve got the teams to manage and deal with it, it’s a waste of time,” he said.
Client priorities are also evolving. Price remains critical, but stability is becoming a more prominent factor in decision-making, particularly following insurer exits and disrupted claims experiences. Cunningham said clients that have experienced insurer failure or run-off situations are placing greater emphasis on long-term reliability and service.
For fleet operators, insurance represents a significant cost with direct impact on profitability, making insurer selection increasingly strategic. Discipline may be holding for now, but as competition builds, the market will quickly reveal whether that resolve is real, or temporary.
