The soft PI market of 2026: how larger firms should use the renewal window

For most of the past five years, the conversation at a professional indemnity renewal ran one way. Since the market hardened around 2019, larger firms grew used to rising rates, narrowing appetite and insurers asking harder questions in return for less cover. That has changed. Brokers’ published 2026 market reviews now describe professional indemnity as a soft market: capacity is plentiful, more insurers are competing for well-run risks, and firms that can show a clean claims history are being offered genuine reductions and broader terms.

For a managing partner or finance director, this is welcome news. It is also a moment that quietly rewards the firms that think about it properly and costs the ones that do not. A soft market is not simply a discount waiting to be collected. It is a window — and windows close.

What a soft market actually means for a larger firm

Three things tend to move together. Capacity becomes plentiful, so there is more underwriting appetite to go round, both at the primary level and in the excess layers that make up a larger firm’s programme. Competition picks up, so insurers work harder for new business and for renewals where the risk profile is clean. And terms loosen: for firms with a good record, that can mean rate reductions, the removal of restrictions taken on in harder times, and a greater willingness from insurers to offer longer-term deals — often for eighteen months rather than the usual twelve — which buy certainty and cut renewal admin.

What a soft market does not mean is a soft touch. The published market commentary is consistent on this: underwriting discipline has not gone away. Insurers still look closely at claims history, at the controls in a firm’s contracts, at how work is supervised and how subcontractors or outsourced functions are managed, and increasingly at cyber controls and how a firm governs its use of AI. Cheaper and easier to place is not the same as unscrutinised. The firms getting the best of the market are the ones that can evidence how they run themselves.

The reflex to avoid

In a hard market you fight to keep what you have. In a soft one the temptation is the opposite: to treat the renewal as a formality, take the reduction and move on. That leaves value on the table, and it can do something worse. It lets old compromises ride — an exclusion accepted three years ago under pressure, a limit that has not kept pace with fee income or project size, an excess-layer wording that never quite followed form to the primary. A lower premium feels like a win in the moment. Discovering at claims time that the cover underneath it had a hole in it does not.

Five ways to use the window well

Test the market properly. Even if you are happy with your incumbent insurer, a soft market is precisely when re-marketing costs the least and reveals the most. Ask your broker to test pricing and to explore additional capacity, so that whatever you decide, you decide it against what the market would actually offer today rather than against last year’s number.

Revisit the limit while cover is comparatively cheap. The marginal cost of buying more limit usually falls in a soft market. For a firm that has grown — bigger clients, larger contracts, longer liability tails — the limit that was adequate three years ago may not be now. It is also the moment to check how aggregation would treat a cluster of related claims, because that clause, more than the headline figure, decides what your limit is really worth.

Fix the wording, not just the price. Use your leverage to remove or narrow exclusions taken on in harder years, and — if your cover is built as a tower — to confirm that every excess layer follows form to the primary. The gaps in a larger firm’s programme hide in the layer wordings, not in the headline limit, and a competitive renewal is the best chance to close them.

Weigh tenure carefully. Insurers are more willing to offer longer-term arrangements in a soft market, and for many firms an eighteen-month or multi-year deal is attractive: it buys certainty and takes a renewal off the calendar. The trade-off is that it locks you in if the market keeps softening. It suits a firm that values stability more than the chance to negotiate again next year.

Strengthen, don’t just save. The most valuable use of a soft market, as the broker reviews put it, is to strengthen coverage and secure long-term insurer support — not to shave the premium to its thinnest. A relationship built while conditions are easy is the one that holds when the cycle turns and terms tighten again.

Where discipline still matters

A soft market changes price and appetite. It does not change how a claims-made policy works. If you become aware of a circumstance that might give rise to a claim, it still has to be notified in time and in the right form, whatever your renewal looked like. The duty of fair presentation under the Insurance Act 2015 applies at any rate: a cheap renewal is not a reason to present the risk casually, and a well-prepared presentation still earns better terms than a bare proposal form.

Nor has the cycle been repealed. Terms won cheaply in a soft market can be withdrawn when it hardens, which is the argument for using this window to lock in structure and relationships rather than only price. And if your firm is restructuring, merging or winding down a practice area, run-off cover still needs planning — a soft market makes it easier to arrange, not unnecessary.

What a managing partner or finance director should ask

A handful of questions cut through most of it. Has our risk actually been re-marketed this year, or simply rolled over? Is our limit still adequate for our largest client, our largest contract and our longest liability tail — and how would aggregation apply to a group of related claims? Which exclusions are we carrying that we could now get removed or narrowed? If we run a tower, do all the excess layers follow form? And are we better served this year by the certainty of a longer-term deal or by keeping the flexibility to negotiate again? A broker who knows your firm should be able to answer all five without hesitation.

Frequently asked

The market is soft — should we just take the cheapest quote?
Cheapest is rarely the same as best. In a soft market the smarter move is to use your leverage for broader cover, an adequate limit and a financially sound insurer you can rely on at claims time. A low premium on a policy with an exclusion you did not notice is not a saving; it is a deferred cost.

Is a long-term (eighteen-month or multi-year) PI policy worth taking?
It depends on what you value. A longer term buys certainty and cuts renewal effort, and insurers are more willing to offer it while the market is soft. The trade-off is that you are locked in if rates keep falling. It tends to suit firms that prize stability over squeezing the last few points off next year’s premium.

Should we increase our limit while premiums are down?
Often yes, if your exposure has grown. The marginal cost of extra limit is usually lower in a soft market, and larger clients, bigger contracts and longer liability tails all push the adequate limit upward. Check how aggregation would apply as well, since it decides how far a single limit really stretches.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This article is general information, not advice on a specific policy.