October 2025 PII renewal trends: a welcome shift for law firms

If you renewed your professional indemnity insurance on 1 October, you may have found the process noticeably smoother than in recent years, when the hard market made renewal more of an ordeal. As we noted in our April update, the market had clearly shifted back into soft territory – a trend that continued through this renewal period.

We will be publishing a full analysis of the 1 October renewal, along with our outlook for 2026, in the next edition of our Market Report which is due in January. In the meantime, here are the key highlights.

Capacity

There is plenty of capacity in the market at the moment. No insurers have left the market this year and there have been a number of new entrants. There are 37 participating insurers listed on the SRA’s website for the 2025/26 indemnity year period, which is the highest number it has ever been and significantly more than when the hard market started in 2019 (26).

At Howden we were also able to offer our clients access to exclusive facilities underwritten by A-rated insurers. We also maintained strong, direct relationships with a broad range of A-rated insurers that have long supported the solicitors’ PII market.

Appetite

The increased capacity has led to strong competition among insurers as they are keen to write new business to make up for the shortfall in renewal rates (see further below) and business lost to competitors. Also, incumbent insurers were very keen to retain good firms, and most were prepared to match better terms obtained from another insurer in order to keep the business.

We reported in April that a number of insurers had become much more flexible in their underwriting parameters, especially in their attitudes to higher-risk areas of practice. This continued and the only firms which insurers were not particularly keen to consider were those either with a very high proportion of conveyancing work or involved in high-volume consumer claims work (in light of issues connected to Pure Legal, SSB Law etc.).

Premiums

The majority of our clients benefited from rate reductions These reductions were particularly significant for firms that had previously experienced claims but were able to demonstrate to insurers that their risk profile had improved.

Please note, however, that a rate reduction does not necessarily lead to a lower premium, as this depends on a number of factors. A key pricing factor for insurers is a firm’s overall gross fees. Many of our clients had achieved gross fee increases over the past 12 months and, if this increase is significant, it can result in a higher premium even though the rate is lower than the previous policy period.

Policy period lengths

Almost all insurers were offering longer-term policies as standard (typically 18 months). This was the case even for firms which had significant fee income growth projections, which would normally make offering a longer-term policy less attractive to an insurer, but make this option even greater value to an insured.

Many of our clients took advantage of this and opted for an 18-month policy this time round. The appeal is clear: longer-term cover reduces administrative burden, locks in favourable rates, and provides greater financial certainty over an extended period.

Excess layers

As with the primary layer, the excess layer market has seen a notable increase in capacity, contributing to continued rate improvements. As a result, many of our clients securing up to a £10 million combined limit of indemnity were able to achieve meaningful savings on their excess layer premiums. For limits above £10 million, premiums generally remained stable, reflecting the historically low claims activity at these higher levels — a factor that has traditionally kept pricing competitive.

It’s important to note, however, that excess layer policies are not subject to the SRA’s Minimum Terms and Conditions (MTCs) for professional indemnity insurance. This means policy wordings and coverage can vary significantly between insurers. At Howden, we can provide tailored advice to help ensure your excess layer policy aligns with your firm’s specific risk profile and coverage needs.

Premium financing

In our previous update for the 1 April 2025 renewal, we noted that firms were finding it increasingly difficult to secure financing for their insurance premiums. Credit providers were requesting more detailed financial information, applying stricter lending criteria, and taking longer to make decisions – a trend that has persisted.

That said, the picture was mixed this time around: while some firms faced challenges, others with stronger credit profiles were able to shop around and secure more competitive interest rates from premium finance providers. We also noted that more clients taking out 12-month policies opted to pay in full upfront rather than take out financing, although those taking out longer policy periods tended to continue to use finance.

Given that financing remains a hurdle for many, we strongly recommend arranging your premium funding as early as possible - especially if your firm’s financial position is less robust.

Cyber

There was an increase in uptake of cyber insurance by firms, although adoption of cyber insurance remains low amongst the legal profession, despite the very real threat of cybercrime to law firms. There have been some recent new entrants to the market  which has led to premiums reducing slightly, despite an increase in claims activity.

AI

As artificial intelligence becomes increasingly integrated into legal practice, underwriters are now including questions in proposal forms about its use. They are particularly interested in how AI is being deployed across different practice areas, what governance policies and procedures are in place, and whether staff are receiving appropriate training.

While there have been no significant claims involving AI to date, the rapid growth in its adoption suggests that this is likely to change in the near future. With that in mind, it’s important to be prepared to address these questions carefully when completing your proposal form.

Proposal Forms

As we saw during the 1 April 2025 renewal, most insurers were willing to accept short-form declarations instead of requiring firms to complete lengthy proposal forms – a welcome development for many of our clients. We anticipate this will continue into 2026. That said, insurers typically request a full proposal form every three years to ensure they have a full understanding of a firm’s risk profile.

Overall, this renewal season was very positive for our clients, and we expect this favourable trend to carry through into 2026.