Nationwide has stopped renewing home insurance on hundreds of traditional thatched cottages following a change of underwriter, according to reports, raising fresh questions about UK insurers' appetite for higher-risk and non-standard properties.
The building society moved its home insurance underwriting from RSA, which had provided capacity since 2017, to Aviva in September 2025. Since then, homeowners in thatched properties – which typically require specialist cover due to higher fire risk and costly repairs – have been told they no longer meet Nationwide’s criteria and will not be renewed at expiry.
Nationwide has not disclosed how many policyholders are affected, but the impact potentially runs to hundreds of thatched homes, according to a Telegraph report. Market sources said that while thatched and heritage properties make up a small share of the overall UK home book, they can generate a relatively high share of claims costs and underwriting work. The changes are also reported to apply to properties with subsidence or flood risk, listed buildings and high‑value homes, pointing to a broader tightening of appetite around non‑standard risks.
'Very disappointed'
One affected customer, Ian Townsend, said his Buckinghamshire home, “The Thatched Cottage”, had been insured with Nationwide since 1983. A month before renewal, he received a letter stating the policy could not be extended because it did not meet Aviva’s underwriting criteria.
“I was just discarded without any explanation, just a bland statement,” he said. “I’ve been a loyal customer for over 40 years, and expect more information and notice. I’m very, very disappointed.”
An Aviva spokesman said: “Any policy changes have been communicated in advance of renewal so that customers can make an informed choice about their home insurance.” On the other hand, a Nationwide spokesman said policies had not been cancelled mid‑term, but instead not renewed where they fell outside Aviva’s appetite.
“We have not cancelled any home insurance policies as a result of our move to Aviva. We wrote to customers ahead of renewal to outline what will happen when their current policy comes to an end and whether they would be automatically moved on to our enhanced or essential product through Aviva, depending on the level of cover required,” the spokesman said.
Shrinking appetite for non‑standard home risks
The event underlines how quickly capacity can change for non‑standard home risks, particularly thatched, listed, subsidence‑affected and flood‑exposed properties, when a major retail brand switches underwriting partners. Thatched cottages can carry higher fire and rebuild costs, and many flood‑ and subsidence‑prone homes are already seeing higher premiums and tighter terms as insurers deal with inflation, rising rebuild values and more frequent severe weather.
Underwriters said tightening criteria on non‑standard segments is one way to keep aggregate exposures within reinsurance and capital limits without broad rate increases across standard portfolios. As composite providers standardise wordings and narrow eligibility, long‑standing customers can be moved into the specialist market at a single renewal.
Specialist MGAs and regional brokers focused on non‑standard and heritage properties are likely to see more enquiries from customers who originally bought cover through a mortgage relationship and may have limited experience of the wider market. For those firms, this means additional volume of older, higher‑risk housing stock at a time when reinsurers and rating agencies are paying close attention to UK property accumulations.
Consumer Duty and complaint risk
The situation also raises potential Consumer Duty questions for large distributors and their underwriting partners. Even where policies are not cancelled mid‑term, regulators are expected to look at whether customers receive clear, early information about non‑renewal and practical guidance on their options.
If significant numbers of homeowners said they were left looking for cover late in the renewal cycle, both Nationwide and Aviva could face scrutiny from the Financial Ombudsman Service and the FCA over whether they met expectations on fair outcomes and treatment of vulnerable customers.
