What are the main factors driving insurance premium increases in 2026?

Several factors are contributing to premium increases in the UK commercial insurance market in 2026, including rising construction and repair costs, increased claims frequency in certain sectors, and the ongoing impact of climate-related events on property insurance. Insurers are also responding to higher reinsurance costs. The extent of any increase will depend on your specific risk profile and claims history.

How can businesses reduce their insurance premiums in a hardening market?

Businesses can take steps to manage their insurance costs in a hardening market, including improving risk management and security, maintaining a clean claims history, reviewing their sums insured to avoid underinsurance, and working with a specialist broker to access a wider panel of insurers. Demonstrating good risk management to insurers can result in more competitive terms.

What is a hardening insurance market?

A hardening market is one in which premiums are rising, insurers are applying stricter underwriting criteria, and cover may be more difficult to obtain. This typically occurs after a period of significant claims activity or when reinsurance costs increase. A hardening market makes it more important to work with a specialist broker who can access a wider range of insurers.

Should I review my insurance cover more frequently in a changing market?

Yes — in a changing market, it is advisable to review your insurance cover more frequently than the standard annual renewal cycle. Changes in construction costs, the value of your assets, and your business activities can all affect the adequacy of your cover. A specialist broker can help you identify any gaps and ensure that your cover remains appropriate.

How does the insurance market affect small businesses differently from large businesses?

Small businesses may find it more difficult to absorb premium increases and may have less negotiating power with insurers. However, a specialist broker with access to a panel of insurers can help small businesses find competitive terms. Small businesses should also focus on risk management to maintain a clean claims history, which is one of the most effective ways to manage insurance costs.

2026 UK Insurance Market Update

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