The UK professional indemnity (PI) market may not be experiencing a spike in claims severity, but that doesn’t mean underwriters are at ease. For Mark Plews (pictured), director of underwriting for national markets UK at Markel, the real challenge is subtler and more structural: falling rates in a market where emerging risks are mounting.
"We're not actually seeing a huge change in claims severity," Plews said. "We monitor the trends all the time, and underwriting and claims stay very well connected. But even if the claims picture was to stay the same, and severity or frequency doesn't increase, falling rates will clearly impact bottom line performance."
The current softening cycle is the first many newer underwriters have seen, which Plews says raises training and awareness challenges.
"The key for us is to maintain rate adequacy," he said. "It might be 3% this year, then 3% next year, but what’s the aggregate effect of that?"
Markel's approach remains rooted in long-term consistency. "We don't want to be an in-and-out market," Plews said, citing the firm's continued presence during COVID as an example. "We paid the COVID claims quite quickly, that's how we want to operate."
Still, broader uncertainty complicates matters. "Inflation remains stubborn, sanctions and supply shortages persist, and environmental factors are more relevant than ever," he said. "That makes it more important to put information in front of underwriters so they can make qualified decisions."
As underwriting hubs expand beyond London, the shift isn’t just about capacity and pricing, it’s also redefining service and accountability.
“I think that's a good thing,” said Plews. “Having people you can contact, having people you can pick up the phone to – building relationships and trust. I think trust is quite an important thing both ways.”
He believes regional expansion can improve service while increasing competitive pressure. "More markets accessing more parts of the UK means pricing pressure. Costs are lower outside London, and that will inevitably impact competition," he said.
The local presence also empowers underwriters. "If a case comes in, they own that relationship with the broker and deliver the service. That's what we’re looking for."
When it comes to construction, technology, and other specialist lines, the landscape is shifting underfoot. Artificial intelligence, geopolitical instability, and regulatory scrutiny are all pressing concerns – though not yet fully reflected in claims.
"With AI, we haven’t seen a ton of change in our claims activity yet," said Plews. "But it’s hard to imagine that this won't happen. Companies are passing more sophisticated work to AI. There'll be errors in their outputs, a lack of transparency, an increase in cyber vulnerabilities... I think there's a lot to happen there."
Regulatory pressure, he added, remains constant. "It evolves, and we adapt. That’s just a fact of trading in the UK insurance market."
Fraud is another rising concern. "Social engineering, deep fakes – these could all impact how our book evolves. We're preparing, even if the changes haven't hit yet."
PI and cyber continue to converge in complex ways, making wordings and coverage clarity critical for brokers.
"Cyber evolves faster than any other market we've seen," Plews said. "These are areas that 10 years ago we wouldn’t have been dealing with, now we are. The temptation is to go for cheaper markets, but you want to make sure the client is looked after."
He added: "Find a partner that’s in it for the long haul – through the cycle, through the claims. Someone who can support the broker and the client effectively."
Even without a dramatic rise in claims, today's PI market is being reshaped by external forces: economic uncertainty, technological disruption, and heightened client expectations.
"After a period of relative stability, we’re all adjusting to a more unpredictable world," Plews said. "That means staying close to the data, close to the broker, and focused on underwriting discipline."
For brokers and insurers alike, clarity and consistency may be the most valuable assets of all.
