Throughout 2020 we saw prices increase in the U.K. property and casualty market, which will intensify this year – hardening the market. In plain terms, a hard market is when there is a reduction in insurance capacities, increase in premiums and fewer competing insurers. Insurance policy conditions may become tighter, which is likely to increase compliance costs.

What are the causes of the hard market?

Usually, the insurance market moves cycles between hard and soft market conditions.  Over the years, we have been in a soft market where conditions were competitive, leading to a reduction in premiums. With time, this became unsustainable, which led to the market changing – ‘hard market’. A few factors that are driving the hard market are:

  • The severe hurricane and bush fire seasons hitting the international reinsurance market.
  • The capital requirement of Solvency 2, which means that underwriters need to maintain capital, thereby increasing the risk transfer price.
  • The changes to the ‘Ogden’ discount rate (a legal instrument used by judges when making awards for long term injury), which increases the cost of serious and long-term injuries to the insurance market.
  • The impact of COVID-19.
  • U.K. property insurance prices have been low by historical standards and unfortunately, the U.K. market was hit by £420 million of flood claims in early 2020.
  • The reverses suffered by the stock market continue to have a negative effect on insurers investment income which is a vital part of their revenue

Is it a hard market now?

Yes, it is for some types of insurance. Our view is that the market will enter the first hard phase since the early 2000s, prompting market conditions that many professionals and customers haven’t seen before. Also, the U.K. motor market underwent an upward price change in 2018 and subsequently, some new capacity entered the market in 2019 and 2020, whilst there is still more expected in 2021.



What does this mean for your business?

With the hardening market, premiums will increase, and underwriters will be more demanding about the risk management controls, risk information and policy terms and cover. Risk management will be important in avoiding the worst of what is to come. As always, the best business attracts the best rates. The quality of information supplied and support from your broker will be imperative to manage and control the impact of these changes. The broker will need broad access to the insurance market and a clear understanding of the information underwriters need. Our risk management brand- Cowens Risk Solutions are here to help you if you need advice on how to maximise the value from your risk management spend.

 How can we help you?

With over 47 years of experience, our team of highly trained, seasoned experts are well prepared for these market changes, as we have been through this before. We can deliver cost-effective solutions for your business with quality technical competence. We understand what you do and present the best options to the underwriters on your behalf. Our business values deliver survival solutions, advice and expertise to our clients. We produce a cost-effective, comprehensive insurance programme designed to protect you and your business.

Are you ready to safeguard your business?

For more information on The Hard Market, you can contact our insurance experts on 01623 649931  or send an email to

Alternatively, click below to view more information on manufacturing insurance and how Cowens can help:-


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