UK & Isle of Man General Insurance Market Outlook – Summer 2025 

by Ann Zachorecki, Group Broking Manager

This article reflects the opinion and professional insight of Ann Zachorecki, based on over 20 years of experience in the insurance industry. The statistics referenced are drawn from a variety of reputable industry sources.

The UK and Isle of Man general insurance market in 2025 is navigating a dynamic and evolving landscape. A combination of inflationary pressures, regulatory developments, environmental risks, and a shifting talent pool is contributing to a complex operating environment for insurers, brokers, and clients alike.

The insurance market continues to be heavily impacted by inflation and rising claims costs:

• Motor and Home Insurance: Premiums have surged as a result of persistent inflation, global supply chain disruption, and higher labour and material costs. According to the Association of British Insurers (ABI), the average price paid for motor insurance in Q1 2024 rose by 33% compared to the previous year—the highest annual increase since tracking began.
• Weather-related claims: Home insurance in particular has seen average premium increases of around 8%, driven by more frequent seasonal weather events and rising reinsurance costs.
• Parts & repairs: vehicle parts and repair delays continue to extend claim durations and increase settlement costs, adding further pressure to motor insurers.

Both the UK and Isle of Man regulatory environments are tightening, with increased focus on governance and customer protection:

• The Isle of Man Financial Services Authority (IOMFSA) has signaled greater scrutiny of the general insurance intermediary sector, including thematic reviews, stricter Anti-Money Laundering (AML) obligations, and enhanced oversight on conduct and compliance.
• In 2024, the FSA issued more public notices and penalties than in the previous three years combined.

Environmental risk is now front and centre:

• Insurers are under increased strain due to the rising frequency and severity of flooding, wildfires, and storms. The UK saw over 6,000 flood claims in the first half of 2024 alone, linked to unseasonal weather events.
• This is placing significant pressure on underwriting models, increasing reinsurance costs, and forcing more nuanced risk selection, particularly for high-risk geographies.
• In the Isle of Man, while large-scale catastrophes are less frequent, insurers are still exposed to rising costs via global reinsurance pricing trends.

Digital transformation remains a strategic priority:

• Insurers and brokers are increasing investment in AI-powered underwriting, automation, and data-driven pricing tools. Larger firms are also piloting natural language processing and chatbots for claims triage and FNOL (first notification of loss).
• While these technologies offer efficiencies, firms face challenges balancing automation with the human element, especially when it comes to empathetic claims management and complex commercial risks.
• Legacy systems remain a barrier for many smaller or traditional brokers, creating a digital divide in the market.

Attracting and retaining skilled professionals is becoming increasingly difficult, especially in the Isle of Man:

• The Island faces a shortage of qualified commercial insurance brokers, with many experienced professionals nearing retirement age.
• Upskilling existing staff and making the profession attractive to younger talent is a growing priority and is something that the CII Isle of Man branch are working to address.
• There is a growing need to adapt to hybrid working expectations while maintaining high levels of client service and compliance.

Sources

• Association of British Insurers (ABI) – Motor Insurance Premium Tracker Q1 2024, Climate Resilience Report 2024
• Isle of Man Financial Services Authority – Annual Report 2024, Regulatory Outlook
• British Insurance Brokers’ Association (BIBA) – Insurance Market Overview 2024
• Deloitte – UK Insurance Industry Survey 2024