Insurance Market Conditions in 2023

The insurance industry is constantly evolving, and it’s important for insurance professionals to stay abreast of the latest trends and predictions, so we can guide and advise our clients. The insurance industry has shown flexibility and resilience in recent times, with its systems and capabilities under the spotlight as it responded to the events of 2020. The challenges of 2023 are numerous, ranging from rising inflation, higher interest rates, climate change and competition from new sources so there is no time to sit back. New challenges are coming, and with them the insurance industry must build on the momentum and deliver a culture of innovation with the client front and centre.

This blog post will provide an overview of the UK insurance market in 2023, as well as some insights into how we think the industry is likely to change in the coming year to eighteen months. 

Overview of the Insurance Market in 2023

The global insurance market is expected to reach $5.7 trillion by 2023, growing at a compound annual growth rate (CAGR) of 4.2% from 2020 to 2023. This growth is being driven by several factors, including:

  • The increasing demand for insurance products and services, as people become more aware of the risks they face.
  • The growth of emerging economies, which are providing new opportunities for insurers.
  • The development of new technologies, which are making it easier for insurers to offer products and services that are more tailored to the needs of their customers.

The UK insurance market is also expected to grow in 2023, with premiums expected to reach £320 billion. This growth is being driven by the same factors that are driving growth in the global market, as well as by the UK’s strong economy.

Market Predictions for 2023/4

There are a number of trends and predictions that are likely to shape the insurance industry in 2023. These include:

  • The increasing importance of ESG (environmental, social, and governance) factors. Insurers are under increasing pressure to invest in sustainable businesses and to avoid underwriting risks that could have a negative impact on the environment.
  • The growing impact of geopolitics. The ongoing war in Ukraine is a reminder that geopolitical events can have a significant impact on the insurance industry. Insurers will need to be prepared for the possibility of further disruption in the coming year.
  • The continued development of technology. Technology is changing the way that insurance is delivered, and this trend is likely to continue in 2023. Insurers and brokers that can embrace new technologies will be well-positioned to succeed in the future.
  • The rise of claims inflation. The cost of claims is rising in many parts of the world, and this is putting pressure on insurers’ profitability. Insurers will need to find ways to manage claims inflation to remain sustainable.
  • The challenges of climate change. Climate change is a major risk for insurers, and the industry is likely to face increasing pressure to adapt to the changing climate. Insurers will need to develop new products and services that can help their customers to manage their climate risks.
  • Hard market conditions. Inflationary pressures, the looming threat of recession, fallout from Russia’s invasion of Ukraine, and legacy COVID-19 concerns. Rising reinsurance rates are also contributing to market hardening while adding to primary insurer operating costs.

Implications for Insurance Professionals and Buyers

The trends and predictions outlined above have a number of implications for insurance professionals and buyers. For professionals, it is important to stay up to date on the latest developments in the industry to provide their clients with the best possible advice. For buyers, it is important to understand the risks they face and to choose the right insurance products and services to protect themselves.

While were unable to cover all aspects of the current market in this article, here is a summary of what we are seeing in the market and how these factors are impacting on insurers appetite for risk. 


The impact of Covid-19, Brexit, and supply chain shortages together with the hard Professional Indemnity market has seen additional pressure on brokers’ ability to place complex construction risks, against the backdrop of the cladding scandal. And the imminent introduction of the Building Safety Bill could be too much for the faint hearted but, with detailed risk information and strong insurer relationships, cover can still be found.


The motor market continues to be challenging. The drive towards new vehicle technology continues to put a strain on the UK’s repairer network. Global energy and supply chain issues are increasing the cost of parts, labour and replacement vehicles. These pressures are driving up the cost of damage claims. 

Professional Indemnity Insurance (PII)

The professional indemnity market has seen a sharp rise in premiums and a reduction in capacity. Many insurers worry that they will see an increase in litigation because of working from home and the lack of supervision, resulting in failure to keep adequate records. This has led to some solicitors, unable to find affordable insurance, merging or becoming consultants for larger firms. There is now a greater focus on ensuring that policy excess amounts are at appropriate levels, and insurers are looking carefully at cover in certain areas such as fire safety & cladding. However, there is light at the end of the tunnel with GRP reporting that several insurers have indicated increased capacity for 2023 and new entrants to this market are anticipated. [1]

Directors & Officers (D&O)

Companies return to work policies will be under scrutiny as will their balance sheets as the government support is phased out and a rise is expected in insolvency. Companies could also find themselves under scrutiny for their ESG policies and how these are implemented and measured, as focus grows on the Green credentials of companies by shareholders, employees and the wider public. We are optimistic that market conditions have improved with greater appetite from insurers increasing competition for the right risks.

Cyber Insurance

The cyber market is fast paced evolving, but current predictions that ransomware is the next pandemic might not be far of the mark. We are seeing both a rise in the demand for cyber insurance and a rise in claims. Insurers are becoming much more selective in their risk appetite and brokers need to be on top of their game to present risks in the best light to get the best terms.

How to adapt to market changes (emerging risk and opportunities) 

Adapting to insurance market changes, including emerging risks and opportunities, is crucial for the insurance industry and will enable them to remain competitive and meet the evolving needs of their clients. When it comes to our research across the industry two areas are concerns that as we recognise emerging risks the lack of effective insurance solutions is leading to a protection gap, since the pandemic people have become increasingly aware of the need for protection, two of these areas are climate change and cyber risks. 

Climate change poses significant challenges to the insurance industry as natural disasters become more frequent and severe. The protection gap, which refers to the disparity between economic losses and insurance coverage, must be addressed. Insurers can tackle this gap through enhanced risk assessment and underwriting, incorporating climate-related risks by analysing historical data and collaborating with climate scientists. They can also develop innovative products tailored to climate risks, such as innovative cover for floods, wildfires, or windstorms. Additionally, businesses and insurers who actively support risk management as part of their preparedness plan help by narrowing the protection gap.

Cybersecurity risks have become a major concern for individuals and businesses alike. The protection gap in cyber insurance arises from inadequate coverage, underestimation of potential losses, and gaps in risk awareness. Insurers can play a vital role in raising awareness about cyber risks. This involves educating customers about the importance of cybersecurity practices, such as strong password management, regular software updates, and employee training. By fostering a culture of cyber resilience, insurers can help reduce the likelihood and impact of cyber incidents.

By focusing on risk assessment, product innovation, risk mitigation, education, and comprehensive coverage, insurers can address the protection gap and seize opportunities in these evolving market segments.


The progress of the economic recovery and the global geopolitical landscape, along with decisions regarding regulatory efficacy, continue to be significant unknown factors. The introduction of the Consumer Duty serves as a regulatory framework for insurers and brokers to deliver greater transparency, suitable products, and improved fairness and accountability to clients. It aims to create a more balanced and customer-focused insurance industry, fostering trust and confidence between clients and service providers. Although many brokers would argue that this is what they are already doing. 

It is only right that customers rely on insurance brokers to know what is happening in the industry and to provide expert guidance, especially during these uncertain economic and political times. We pride ourselves on being expert brokers who are aware of the market news and trends and can translate this into tailored advice to our customers. We are always making sure that we meet the demands and needs of our customers and openly communicate about cover, exceptions, and policy updates as they happen.

What to do Next

If you’d like more information on anything you’ve read in this article, then please contact us on 01702 543306 or visit us at


[1] GRP –