The UK professional indemnity (PI) market is entering a new phase, one shaped as much by regulatory overhang as by the aftershocks of Grenfell. For experienced underwriters, it’s familiar territory: price softening, capacity chasing volume, and new entrants testing the water. But the context, said Pete Newson (pictured) of Euna, is anything but typical.
“Most of my time since 1988 has been in a soft market,” Newson said. “But this last hard market lasted longer than most expected, close to four years. And now the softening has come quickly.”
That speed matters. After a prolonged period of price discipline and cautious terms, competition is intensifying across PI classes. Brokers are pushing harder. Underwriters are under pressure to retain business. And while some markets are easing fire safety exclusions, the underlying exposures haven’t gone away.
“There’s a natural cycle - claims results improve, markets return, pricing drops,” said Newson. “But in PI, especially construction-related, the full picture always lags. You don’t see the true extent of losses for years.”
Nowhere is that more apparent than in fire safety. Post-Grenfell building regulations, introduced in 2018, are only now filtering through to underwriters in a meaningful way. The delays in remediation, planning approvals and cladding updates mean that legacy risk is still embedded in many client portfolios.
“From a construction PI perspective, fire safety has been the biggest shift,” Newson said. “The regulations changed years ago, but buildings designed under the old standards are only now being built or occupied. That’s where the claims will come from.”
This isn’t a marginal adjustment. Fire safety is now a central underwriting factor, and Newson warns that brokers must address it head-on. “Clients are still vulnerable for their historical issues. The earlier brokers bring that detail to market, the better the outcome.”
Unlike many past scare cycles in PI - from Y2K to GDPR - the Grenfell-driven regulatory overhaul has had real and lasting consequences. And while financial regulators like the FCA and PRA haven’t significantly reshaped PI underwriting, the impact of building standards reform has been profound.
Still, opportunity remains. Carriers with long-term capacity relationships and deep technical insight can use the transition to stand out. “If you know the risk and can explain your rationale to capacity providers, you can still grow a profitable book, even now,” said Newson.
He sees the current moment not as a retreat, but as a reset. “We’re seeing a relaxation in some fire safety exclusions, particularly from mid-2025 into 2026. That reflects growing confidence, but it has to be earned through proper underwriting.”
For brokers, the challenge is twofold: articulate legacy fire risk clearly, and prepare for increasingly divergent underwriting approaches. As new entrants look to build volume, some may adopt looser standards before fully understanding the exposures.
“A majority of the PI market understands this,” said Newson. “However, there are still some providers that could get caught out if they’re too relaxed, too soon.”
In a cyclical market, the temptation is always to follow the volume. For PI specialists, the challenge now is to stay disciplined, balancing competitive pressure with a clear-eyed view of legacy risk.
