The UK Property Insurance Landscape in 2026

This blog aims to provide insight into the current state of the UK property insurance market, offering context for our clients on what to expect for their 2026 renewal.

See our director Tommy Hodgson's comments below:

I have identified key market themes and tried to provide an indication of what our clients might expect to experience this year.

The Current State of the Market & Outlook for 2026

The start of 2025 saw quite a swift softening of the UK property insurance market and that trend continued through the year. With an abundance of capacity and insurers aggressively pursuing growth, the softening trend looks set to continue throughout 2026. Well-managed and good-performing risks can expect rate reductions and insurers are also loosening some of the more restrictive terms they applied during the harder market. In the past few months we’ve seen insurers willing to reduce excesses, remove or soften flood terms and give cover enhancements.

With a number of new entrants to the market it’s more important than ever to make prudent placement decisions. It’s likely that buyers will have a choice of offers and while price must always be a consideration, other factors such as breadth of cover, financial strength of the insurer, attitude to paying claims and the long-term outlook of your insurer should come into play. Taking a cheap price from a newly formed MGA with “offshore” capacity might not look after your long-term interests. Experience tells us that some of the new entrants may only be around for a short period of time when their claim costs increase!

The "bright" outlook for 2026 is tempered by emerging risks that could shift the current soft cycle:

Profitability Pressure: S&P forecasts that UK property and casualty profitability may drop slightly in 2026 as claims inflation (particularly in motor and construction) continues to bite.

Volatility Drivers: Geopolitical tensions and unpredictable weather patterns (such as record subsidence claims in early 2025) remain the primary "wild cards" that could trigger a market reversal later in 2026.

Cyber Integration: Cyber insurance is becoming a standard discussion point in property renewals, with the UK market projected to double by 2030. Clients should expect more rigorous questioning regarding their digital risk controls, even for physical property placements.

Indexation Rates and Valuations

Indexation rates remain fairly steady at around 3 to 4%. It still remains extremely important to have regular reinstatement valuations carried out on your property (we suggest every 3 years) as we continue to see valuation reports that show the sums insured to be significantly out.

According to a recent report from Rebuild Cost Assessment following data from 43,000 comprehensive property Assessments, 93% of properties are insured for the wrong amount, 70% underinsured and 23% overinsured.

In all probability, your Property Owners policy will have what is called an “Average” clause, which means that any claim settlement could be proportionally reduced by the percentage of underinsurance. If your policy has an average waiver, this would require an insurance reinstatement valuation being carried by a Fellow or Member of the Royal Institute of Chartered Surveyors every 3 to 4 years, depending on your policy wording.

Other Market Themes

Insurers have a close eye on Lithium batteries, e-scooters and battery storage with regards to risk management. In addition with electric vehicles becoming more common, insurers would need to know about any EV charging points at your property and how close they are to the actual building. EV charging points in basement car parks would come under very close scrutiny and a robust risk assessment would be required.

Insurers are also very keen to understand how property owners are managing their exposure to escape of water claims, particularly at residential locations including blocks of flats.

Conclusion

We expect the current soft cycle to continue through 2026 as insurers compete with each other for business. Customers with good performing risks should expect favourable terms but we recommend having one eye on the long term when making purchasing decisions.

As your insurance broker we are committed to supporting you through the insurance buying process and will be working hard to secure you the best possible terms from insurers. If you have any questions or concerns regarding the information contained in this document then please do get in touch with either myself or your account executive or handler.

Tommy Hodgson

Managing Director