PORTFOLIO ANALYSIS
At Lockton, we are privileged to represent a vast number of the legal community of England & Wales in their insurance renewals. Having initially assisted the profession with excess layer coverage, and then placing all layers post-Solicitors Indemnity Fund, we are proud to be the chosen insurance intermediary for many within the profession.
We have analysed data from across our portfolio of SRA regulated practices for insurance renewals placed between 1 June 2025 and 31 May 2026. This encompasses approximately 1600 practices of varying size and profile. As with any data analysis of such a meaningful sample size, there are notable trends, but there are also some metrics dependent upon a firm’s risk profile.
Firm revenues
A large majority of firms experienced an increase in their fee income, with the fees variance increasing on average 8.97%. We have broken this down further by revenue banding, firms with between £10M-£25M of annual revenues experienced the largest percentage growth, that said, the past 12 months reflects a positive picture across the Lockton portfolio. The growth in fees has been well received by Insurers, it is a sign of strong performance across the profession, and the growth in fees has also helped to facilitate notable rate reductions for many within the profession. Larger firms lead sector-wide revenue growth Average firm revenue change by fee income banding
Rate
The majority of professional service firms will be aware of reference to the “rate” on revenue being a fundamental metric as to the outcome of a professional indemnity insurance renewal. Assessing the data by year across our portfolio, we have mapped the average rate for each revenue band. Across the previous three renewals from 2023/24 onwards, there has been a dilution in premium as a percentage of a firms’ revenue for each revenue band. The downward trajectory continued in 2025/26.
It is important to note that such is the breadth of work undertaken within the profession, there will be notable fluctuations between firms subject to the area(s) of work undertaken. For example, a high-street family firm will likely be paying a much lower rate than average, compared to a residential property specialist who may have a larger rate on fee income than the average. The key takeaway from the data is that rate across the revenue bands has diluted for law firms.
Reductions across the board Primary rates by year and fee income band
Primary premium rate change
The graph below provides a granular breakdown on the percentage shifts within each revenue band as per the previous graph. The grey line demonstrates the rate reduction for each fee band for 2023/24 to 2024/25, and the blue line demonstrates the rate reduction for 2024/25 to 2025/26. Both years experienced rate reduction, and the trajectory increased over the past 12 months. In 2024/5 the £10M+ revenue band experienced the largest rate reductions, whereas in 2025/26, it was firms between £5M-£10M of revenue who had the largest rate reductions. Rate reductions accelerate in the last year Primary rate change by year and fee income
Co-Insurance
In PII, co-insurance refers to two or more insurers agreeing to share risk. Each insurance company underwrites a specific, agreed-upon percentage of the total coverage. In this arrangement, the primary (or “lead”) insurer manages the policy administration and handles any claims, but ultimately passes an agreed percentage of both the premiums and any subsequent claim payout(s) to the “following” insurers.
In recent years, SRA Participating Insurers have demonstrated an interest in underwriting law firms on a co-insurance basis. What has notably shifted in recent years is the appetite for insurers to offer co-insurance options for firms below £20M of revenue. The benefit to insurers of reducing their exposure to a smaller than 100% “line” is that it helps to ventilate insurer portfolios from significant losses, especially in respect of “sideways loss” (multiple losses of the any one claim limit). With rates continuing to dilute, some insurers have also managed to remain competitive by insuring a smaller share of the risk, allowing insurers to be slightly more aggressive in their pricing.
This increase in appetite from insurers to offer co-insurance can be recognised in the graph below. There has been a growth in co-insurance in recent years, and 2025/26 saw a significant increase. We predict co-insurance will continue to grow as a feature of a primary layer insurance programme.
Growing appetite for co-insurance Percentage of firms purchasing primary layer co-insurance
Purchasing of insurance above the SRA compulsory limit
In addition to the primary layer of insurance, the past 12 months has also resulted in a continued dilution of the cost of excess layer above the compulsory limit of insurance. This is in contrast with the claims environment for excess layers, with some notable losses being of a size that resulted in the triggering of excess layer policies to respond.
Despite this, the financial performance of firms, increasing asset values, and inflationary pressures still impacting the UK economy, our data shows there was no increase in the number of firms purchasing above the compulsory layer of insurance.
For the reasons listed above, an increase in limit may well be prudent to consider at firms forthcoming renewals. The more challenging renewal cycles of the early 2020’s did result in some firms removing excess layers due to cost, with more capacity in the layer above the compulsory limit, the expectation is for cost to dilute further in the next 12 months.
Excess layer purchasing remains stable Percentage of excess layer and primary layer-only purchases
April and October dominate renewals Percentage of clients by last renewal date
When are firms renewing?
It is now 13 years since the SRA waived the requirement for a common renewal date. Despite this, the majority of firms still renew in either April or October – the main reason for this is insurers will offer either 12- or 18-month policy terms. This said, some firms took a decision to move their renewal date outside of the two core dates, in addition, new start firms have policies in place from their date of authorisation. As time continues to progress and more firms are authorised, the anticipation is for more firms to renew outside of the two core months.
Extended policy periods
With the pricing environment being favourable, and revenue increasing for the majority of the profession, there was an increase in firms purchasing an extended policy term beyond the annual period.
The majority of insurers were providing extended terms on a pro-rata premium basis.
The past 12 months resulted in over 25% of our portfolio renewing for a period of over 12 months. This is a meaningful increase on both the 2023/24 & 2025/26 renewals. As we head in to the forthcoming 12 months, insurers still maintain a notable interest in extended policy terms. For firms who wish to extend for a longer period, the choice to do so will likely present itself.
More firms are purchasing extended policy terms Percentage of annual and extended policy terms purchases