Briefing: What New Year’s resolutions should UKGI be making for 2025?

By Jon Guy

As the UK general insurance industry welcomes the arrival of 2025, there are likely to be a number of New Year’s resolutions which it hopes will be made and – more importantly – kept.

For example, Lloyd’s of London chief executive John Neal will very likely hope that those tasked with delivering the various parts of the marketplace’s Blueprint Two digital transformation programme will hit the mark this year after 2024 headlines focused on missed deadlines and delayed implementation.

The London market has been littered with failed efforts to deliver new technology over the past three decades – unless tangible progress is made on Blueprint Two in the coming 12 months, then brokers and insurers may well start to question the ability of the scheme.

Brokers, meanwhile, will be hoping that insurers will make a resolution to ensure underwriters are far more accessible.

Trade association Biba’s ongoing research on insurance service standards show that post-pandemic, brokers are finding it increasingly difficult to speak to an underwriter if they have a question.

This issue does not seem to have gone away over time and – as insurers talk about the greater use of technology, artificial intelligence (AI) and digitalisation – brokers will be hoping that their insurance partners remember the difference between a bot and a human contact.

Government’s wish list

Insurers will no doubt hope that the UK government’s New Year’s resolutions do not include a draconian view around efforts to reduce the cost of motor cover.

The Labour party’s specialist taskforce – formed in October 2024 – will go through the gears in 2025, exploring ways to cut motor insurance premiums. Insurers will keep their fingers crossed that any agreed approach is not too punitive.

Changes to the personal injury discount rate, announced by the government at the end of 2024 and effective from this month (January 2025), have so far been welcomed by UKGI – but the drive toward an electric vehicle future brings with it new risks and challenges that will impact the price drivers will be asked to pay for cover.

Lastly, brokers and captive managers will be hoping that the Treasury will conclude its consultation on the creation of regulations that will enable the UK to become a domicile for captives – these rules will drive the costs and complexity of any captive creation in the UK.

The use of captives is increasing as risk managers look to control their premium spend. What this means for the UK insurance sector is another significant weapon in its arsenal to meet the needs of clients that are looking to tackle a range of growing and emerging risks.

We are likely to get a good idea as to whether the Treasury will allow captives to be UK-based in the second quarter of this year.

UKGI will be keeping its fingers crossed that the government will allow the sector to compete with other domiciles in this way, adding to the UK’s attraction as a market.