Insurers remain cautious about flood risks in the UK and mainland Europe, including both coastal, river and surface flooding. The devastating floods in Spain during Q4 2024, particularly in the Valencia province, resulted in costs of EUR20bn for the country’s financial sector, according to the Bank of Spain.

The definition of natural catastrophe risk is expanding beyond the traditional perils of earthquakes, floods, and windstorms in high-hazard areas. Insurers are increasingly concerned about secondary risks, such as severe convective storms, wildfires, and freeze events, which are now included in this broader definition.

Additionally, cyber insurance clauses are still a topic of discussion among insurers.

We anticipate that rates will remain competitive throughout 2025 and into 2026 as insurers strive to gain market share.

A return to long-term agreements (LTAs) of up to three years is readily available, providing stability in premium rates. Built-in reductions after the first year are also available.

We have seen a return to insurers offering to underwrite 100% of risks, rather than taking a smaller percentage, resulting in syndicated risk placements. However, it’s essential to consider the overall risk profile of each portfolio when determining renewal results. Factors such as catastrophe exposure, loss history, required capacity, and risk occupancies play a crucial role.

The use of data and analytics is becoming increasingly vital in the real estate market. Insurers are leveraging advanced data analytics to gain a better understanding of risk patterns, predict potential losses and optimise pricing models. Insurers continue to target mixed-occupation portfolios, which help achieve a broader spread of risk.

Residential properties and portfolios remain challenging within the market. Providing comprehensive underwriting information is critical to securing the best terms and policy coverage.

Recently, the insurance market has placed particular emphasis on understanding whether properties contain e-bikes and e-scooters and other chargeable devices. These items pose a significant fire risk, especially due to the batteries that power them, which have become one of the fastest-growing fire hazards.

There have been several new entrants in the sector over the last few years, and capacity is the strongest it’s been since the merger of several organisations. This has led to more competitive pricing and broader coverage options for policyholders.

Capacity for non-standard building materials continues to be a challenge for the insurance market. When it comes to timber frames, it is more challenging to secure the cover and pricing in line with more traditional construction materials, as this is seen as being more susceptible to fire. Early engagement remains key to securing the best outcomes for customers.