Although the property market is slowly recovering from the effects of COVID-19, 2025 will still be busy with some cases on outstanding issues or ones that are being reconsidered (such as non-damage denial of access clauses). The consequences of recent Court of Appeal decisions on ‘At the Premises’ disease clauses (LIEC v Allianz) and composite policies (Liberty Mutual v Bath Racecourse Company) will continue to be felt into 2025 given the backlog of cases waiting on those outcomes.
In some rare good news for insurers, the issue of whether they can deduct the value of furlough payments from any indemnity paid to policyholders has recently been determined in their favour, for the second time. We also expect a number of disputes focusing on individual cases (mostly quantum and proof of losses) rather than points of principle.
Looking beyond COVID-19, we have listed below some of the things we think will continue to impact property insurers:
- The current economic conditions, increased borrowing costs and changes to the NIC regime in April will continue to pose a real challenge to insured, particularly SMEs:
- We expect to see an increased focus on policy validity/coverage, particularly for SMEs, who may be tempted to reduce insurance costs by curtailing cover;
- The continuing mid-inflationary environment may continue to catch out many businesses who remain under insured. This is likely to impact the retail and hospitality sectors specifically.
- Further focus by insurers in the law of causation following on from decisions such as Brian Leighton, University of Exeter and the extension of the UKSC analysis in the FCA test case from radius clauses to ATP clauses by the Court of Appeal.
- Insurers continuing or increasing their focus on subrogated recoveries as a way to improve the performance of their property books.
- As the electric vehicle market continues to expand, increased awareness and scrutiny in relation to fires caused by lithium-ion batteries in electric vehicles.
- Insurers focusing on scope of cover in relation to natural disasters caused by climate change and extreme weather events.
To read the full section, download the Global Risks: Horizon Scanning report.
