In a market shaped by evolving exposures and emerging industries, underinsurance remains one of the most persistent - and underestimated - threats for clients.
According to a Pen Underwriting 2025 report, “recent research in the UK has found that a whopping 76% of UK properties are underinsured.”
The property sector, of course, is just one example of an area in which appropriate coverage levels are lacking – and brokers play a critical role in identifying these blind spots and ensuring tailored solutions are put in place.
“There are still pockets where customers need insurance and they're not receiving it,” said Pete Treloar, interim chief underwriting officer at Hiscox. “Sometimes that comes through in underinsurance. Sometimes it comes through in just a total lack of insurance.”
Treloar pointed to cyber and directors and officers (D&O) insurance as two key areas where clients are often exposed, despite clear risk signals. “There are still many customers that should purchase [cyber cover] that don't,” he said. “Equally, I think the same is true for D&O.” S&P Global Ratings noted in a recent webinar that “only 5% to 10% of small and medium-sized enterprises currently hold cyber insurance.” For D&O, a Global Information report found that “39.9% of SMEs now have D&O (excluding sole traders), a figure that rises along with company size.” Treloar added: “We want to find solutions for these exposures for all of our customers as well, and to support them as the world continues to evolve.”
Brokers are uniquely positioned to help clients understand and manage these overlooked risks. Practical steps include:
Treloar believes the specialist model is key to addressing underinsurance, particularly for unique or emerging risks. “We don't have binary rules about the kind of risks we want to underwrite. I think where we show up the strongest is for risks that are completely unique, where there is no right answer.”
He highlighted how the need for specialism is growing. “I see that the most need for specialism is in newer exposures and in newer businesses,” he said. “So that could be something like a consultant working with businesses to help them with their ESG credentials or to reduce their carbon footprint.”
Specialist insurers don’t just provide products—they design coverage through close engagement with brokers and clients, he emphasised. “We spend a lot of time speaking to customers, speaking to brokers who specialise in that sector, designing the coverage around them,” he said. “One of the things I'd like to see us do more of in the future is be more proactive in our specialist sectors around where we're seeing claims, where we see more trends coming through and giving more risk management advice as a preventative tool.”
By leveraging the expertise of specialist insurers, brokers can:
While brokers often understand their clients’ exposures, Treloar pointed to a broader challenge: the need for unified education efforts across the industry. “It is a client education piece,” he said. “We, as the insurer, have a role to play here as well in supporting them, but we need to keep working together to improve the level of client education.” He emphasised the importance of simplifying insurance language and access: “I think that it is up to us to work alongside our brokers to explain the risks and to make that journey as straightforward as possible.”
