Miller’s mid-year 2025 update highlights a softening market across construction, professional indemnity (PI), directors’ and officers’ (D&O), and real estate insurance.
Competitive pressures are pushing down rates, while underwriting approaches are being reshaped by evolving risk factors and capacity changes.
Rates in construction lines continue to decline, particularly in transactional and UK domestic CAR business. Carriers are lowering minimum premium thresholds to secure market share, reflecting similar trends in global markets such as the US, Canada, and Australia.
Coverage remains steady, with LEG2 preferred for major projects, though LEG3 is under discussion in some cases. Natural catastrophe (NATCAT) exposure continues to influence underwriting appetite, with single-cat-peril terms common.
Timber frame risks, especially in North America, are seeing limited capacity and are often led by local insurers, with London providing supplementary support. New market entrants such as Arch Insurance and Markel are expected to increase capacity in the coming months, adding to competition.
According to the report, the PI market retains strong capacity, with competition resulting in rate reductions of 5–10% for firms with good claims histories and strong governance. Insurers are now incorporating questions on generative AI use in design, planning, and forecasting to address emerging risks linked to intellectual property disputes, design errors, and inadequate oversight.
The Building Safety Act 2022, with its 30-year retrospective liability period, is starting to influence claims trends. Early rulings suggest greater scrutiny on architects, engineers, and consultants, with potential PI claims arising from safety compliance failures. Coverage for fire safety-related work continues to expand, particularly when completed in line with updated regulations.
Meanwhile, D&O rates remain down 5–10% on average, but insurers are beginning to resist further reductions. Insolvency risk is a growing focus, with underwriters assessing the financial resilience of insureds over the next 12 months. Capacity remains steady, but a prolonged soft market could lead to tightening if claims volumes increase.
Real estate insurance rates have fallen by up to 25% for well-managed portfolios. Long-term agreements of up to three years have returned, with some built-in premium reductions. Insurers are expanding the definition of NATCAT risk to include secondary perils such as severe storms, wildfires, and freeze events.
Flood risk remains a key concern, and capacity for timber frame properties is still limited due to fire risk. Underwriters are also factoring in hazards from rechargeable devices such as e-bikes and e-scooters. The increased use of advanced data analytics is supporting more targeted underwriting and pricing.
Across all sectors, increased capacity is enabling broader cover, but ongoing competition is sustaining downward pressure on rates. This may challenge underwriting profitability if claims from natural catastrophes, construction defects, or insolvency rise in the second half of 2025, Miller said.
Miller’s mid-year 2025 update highlights a softening market across construction, professional indemnity (PI), directors’ and officers’ (D&O), and real estate insurance.
Competitive pressures are pushing down rates, while underwriting approaches are being reshaped by evolving risk factors and capacity changes.
Rates in construction lines continue to decline, particularly in transactional and UK domestic CAR business. Carriers are lowering minimum premium thresholds to secure market share, reflecting similar trends in global markets such as the US, Canada, and Australia.
Coverage remains steady, with LEG2 preferred for major projects, though LEG3 is under discussion in some cases. Natural catastrophe (NATCAT) exposure continues to influence underwriting appetite, with single-cat-peril terms common.
Timber frame risks, especially in North America, are seeing limited capacity and are often led by local insurers, with London providing supplementary support. New market entrants such as Arch Insurance and Markel are expected to increase capacity in the coming months, adding to competition.
According to the report, the PI market retains strong capacity, with competition resulting in rate reductions of 5–10% for firms with good claims histories and strong governance. Insurers are now incorporating questions on generative AI use in design, planning, and forecasting to address emerging risks linked to intellectual property disputes, design errors, and inadequate oversight.
The Building Safety Act 2022, with its 30-year retrospective liability period, is starting to influence claims trends. Early rulings suggest greater scrutiny on architects, engineers, and consultants, with potential PI claims arising from safety compliance failures. Coverage for fire safety-related work continues to expand, particularly when completed in line with updated regulations.
Meanwhile, D&O rates remain down 5–10% on average, but insurers are beginning to resist further reductions. Insolvency risk is a growing focus, with underwriters assessing the financial resilience of insureds over the next 12 months. Capacity remains steady, but a prolonged soft market could lead to tightening if claims volumes increase.
Real estate insurance rates have fallen by up to 25% for well-managed portfolios. Long-term agreements of up to three years have returned, with some built-in premium reductions. Insurers are expanding the definition of NATCAT risk to include secondary perils such as severe storms, wildfires, and freeze events.
Flood risk remains a key concern, and capacity for timber frame properties is still limited due to fire risk. Underwriters are also factoring in hazards from rechargeable devices such as e-bikes and e-scooters. The increased use of advanced data analytics is supporting more targeted underwriting and pricing.
Across all sectors, increased capacity is enabling broader cover, but ongoing competition is sustaining downward pressure on rates. This may challenge underwriting profitability if claims from natural catastrophes, construction defects, or insolvency rise in the second half of 2025, Miller said.
