“ These are turbulent times. Just when we
thought COVID-19 was in the rear-view mirror
and there could be a return to something
closer to ‘as we were’, we have double digit
inflation, high interest rates, significant
recessionary pressures and a cost-of-living crisis.”
Jonathan Newbold
Executive summary
Welcome to our Insurance
Insights 2023.
In this review we reflect on the last year and share our
views as to what we see on the horizon for the insurance
sector in 2023 across various lines of business. We hope
these insights will support you in rising to the challenges
and making the most of the opportunities which lie ahead.
These are turbulent times. Just when we thought
COVID-19 was in the rear-view mirror and there could be
a return to something closer to “as we were”, we have
double digit inflation, high interest rates, significant
recessionary pressures and a cost-of-living crisis. On top of
that domestic economic position, the global geo-political
landscape is turbulent; war on European soil, increasingly
severe weather events, and serious unrest in hotspots and
developing countries around the world. Inevitably these
conditions give rise to challenges for insurance markets
and financial services generally.
In the UK, as with previous recessions, we expect to see
claims frequency and severity increase in the coming
12 months. We anticipate increased ‘unbundling’ of
professional services driven by clients’ desire to use limited
retainers to save costs. That will inevitably create risk for
both client and professional, so we expect the nature of
financial lines claims will reflect this trend. In dealing with
such claims, we anticipate a focus on the extent to which
the professional has assumed a wider duty will be a key
battleground. In determining that the forensic approach
taken in the Court of Appeal decision in Spire Property
Development v Withers in 2022 will prove crucial.
Jonathan Newbold
Partner
jonathan.newbold
@brownejacobson.com
+44 (0)115 976 6581
For property insurers, COVID-19 related business interruption
litigation continues in the wake of the Supreme Court’s
decision in the FCA v Arch test case. Property insurers also
have to tackle rising ‘claims inflation’, with ongoing supply
chain delays, skilled labour shortage and rising costs of raw
materials all having a considerable effect on the time and
cost of reinstatement works.
Increasing litigation and regulation holding companies
responsible for their ESG and climate related actions (or
inactions) is causing major headaches for boardrooms, and
by extension for their liability insurers.
The casualty market continues to grapple with rising
social inflation and ‘nuclear’ jury verdicts in the US,
resulting in an exponential growth in awards in the several
hundred million of dollars.
Lastly, Russia’s invasion of Ukraine and mass seizure of
aircraft has led to numerous disputes between aviation
leasing companies and their All Risks and/or War Risks
insurers/reinsurers, with claims running into the US$ billions.
As our insights show, standing still is never an option – the
need to adapt and proactively manage developments will
remain crucial. We are committed to supporting you in
that endeavour, collaborating with our clients to find new
and innovative ways to successfully navigate routes to
successful outcomes.
If you have any queries or would like more information
on any of the insights shared in this review, please do not
hesitate to contact me or any of the authors directly; we
would be delighted to hear from you.
Best wishes,
