Inflation is a key focus, but, for insurers, higher interest rates will provide some longer-term relief

Inflation remains a key concern.  Areas such as construction and healthcare suggests insurers’ claims and costs could rise markedly in 2023, even without considering changes in claims frequency and other areas.

However, higher interest rates should alleviate some pressure on insurers’ ultimate loss ratios.

Insurance premium forecasts

Slowing global growth and inflation will likely see insurers’ returns lower in 2022 as underwriting performance and investment results are weaker. The continuing hard market and higher interest rates should see a turnaround in the medium term, and we would expect an uptick in performance in 2023 and 2024. We expect financial pressures to maintain the focus on a harder market in the Professional Indemnity and D and O space.

Professional Indemnity Market

The availability and cost of Professional Indemnity insurance (PI) remains challenging in particular for the larger or non-standard risks.  There are many examples of firms struggling to obtain cover at all.

Since 2018, Professional Indemnity rates have been steadily increasing to the extent that it is not unusual for firms to struggle to secure quotes, for premiums to increase dramatically, or for the basis of cover to be altered and indemnity for certain activities removed (both going forward and retroactively).

What has caused this dramatic shift?

In the latter part of 2018, global underwriting results highlighted that PI was the poorest-performing area of underwriting.

Large claims associated with energy from waste projects, renewables installations, and the potential exposure to cladding following the tragic 2017 Grenfell Tower fire have caused significant concern amongst underwriters.

In addition, many insurers are no longer writing Professional Indemnity risks for certain industries, whilst others are exiting the PI market altogether. As a result, there is a surplus of demand and scarcity of supply, so it is proving extremely challenging for some firms to agree indemnity at all, which results in rates increasing substantially and the prolonger hard market we are now seeing.

This challenging market has been compounded by the Coronavirus crisis which will inevitably result in an increase in insolvencies and a challenging economy for a sustained period. These economic challenges often result in an increased propensity for actions, again this is likely to increase claims frequency and premiums will also increase as a result. Therefore, the challenges in this market are expected to continue for the foreseeable future.

Directors and Officers Insurance Market

The directors and officers (D&O) liability insurance market has experienced a challenging year.

Moving into 2023, we’ll see some of these issues resolved, and we’ll also experience new changes in the market with the following general D&O trends that we expect to see in the new year.  

In order to earn the business, we see new carriers entering the market and competing against more-established programs. This is likely to expand risk appetite and offer broader coverages.  

We expect to see more competitive terms and premiums continue to be offered on new business accounts, as well as greater opportunities to negotiate for more expanded coverages.  

We, as underwriters will continue to primarily base renewal premiums on a business’s overall financial strength and specific sector.

In order to retain favourable accounts, we expect that more insurers are likely to reduce premiums for renewals that have maintained a good loss history and that can show best practice in corporate governance and risk management.

Businesses facing claims of alleged D&O wrongdoing will continue to face high court costs to defend and settle claims and these placements could become more challenging.

We note that there is increased regulatory being taken against businesses by regarding cybersecurity disclosures and this is expected to intensify and continue to impact managers and board members.

For many reasons, [D&O liability] coverage needs to be available when directors and officers are targeted in shareholder actions, or when the company comes under regulatory scrutiny in the wake of cyberattacks or other issues.

It’s important to help businesses better understand D&O insurance market trends that could impact your coverage and company bottom line. At Landmark we have a highly experienced underwriting function that is able to offer bespoke and competitive coverage to all types of global risks, however challenging. We will consider the risk on its own merits and not be led by market trends. Our solutions are tailored to every client. We have many years of experience specialising in all aspects of management liability, and we are highly focused on D&O insurance.

What can businesses do?

While PI and D&O market conditions are extremely challenging, it is possible for businesses to take steps to help manage insurance costs and cover. Here at Landmark, we are able to offer bespoke insurance solutions to, even the more challenging risk profiles. We have an innovative and proactive approach and look to provide a quick turnaround time to our key broker clients.


In the case of renewals, the earlier the process is started the better. This allows us to carry out the necessary interrogation required to successfully underwrite any risk, no matter how complex. We would encourage firms to leave plenty of time to put together the extra information that insurers may require and answer any additional questions that underwriters may pose. Providing us with as much information as possible will ensure that we have sufficient time and opportunity to negotiate the best terms possible on your behalf.


It is essential that firms carefully consider the status of any ongoing claims, ensuring that all outstanding matters are dealt with and verified claims experiences obtained from the existing and previous insurers in good time. We will also look to understand what lessons have been learned as a consequence of any losses that have led to claims and how improvements are being made.

We will be placing more focus on a business’s internal procedures and risk management controls when considering any risk. Therefore, it is often necessary to be able to demonstrate the levels of risk management and control by providing documentation and supplementary information highlighting the extent of risk management and procedures; robust cashflow management measures; client and supplier contracts, and supply chain management methods. This shows that a business is well managed, making it more appealing to insurers, which can help to secure robust cover on competitive terms.

Get in touch

Landmark have specialist capabilities in both Professional Indemnity and Directors and Officers Insurance.

Kate Albert – Head of UK Professional Indemnity

Christopher White – Head of Australia and ROW

Stefan Cole – Head of D&O