Broker Barometer 2026: Soft market gives brokers opportunity to tackle underinsurance

Underinsurance isn’t a new challenge for the insurance industry, but our latest Broker Barometer research shows it’s now having a clear and growing impact at the point of claim. The latest findings show that the majority of brokers are seeing an industry-wide increase in claims being declined or settled for less due to underinsurance, as well as 67% of properties being undervalued.

Key findings:

• 82% of brokers plan on using the soft market to address underinsurance
• 68% of brokers report an industry-wide increase in claims being declined or settled for less due to underinsurance
• Our data shows 67% of commercial properties are underinsured – by more than 60%
• Cost isn’t the biggest barrier to adequate insurance – lack of awareness is
• Brokers highlight impact of underinsurance on clients’ mental health

Underinsurance is shifting from a long‑standing industry concern to an issue that is routinely affecting claims outcomes, according to our latest Broker Barometer research; new data shows the proportion and extent of underinsurance in commercial properties.

Brokers say the consequences are now being felt most acutely at the point of claim, with 68% reporting an increase in claims being declined or settled for less due to underinsurance.¹ Against this backdrop, brokers believe the current soft market represents a critical opportunity to help clients address underinsurance, with 82% of brokers saying they plan to make use of market conditions to help clients address underinsurance.

Our data confirms scale of exposure

Broker concerns are reflected in our own portfolio analysis. A sample review of commercial property covers written in 2025² found that two-thirds (67%) were underinsured, with an average shortfall of 79% between sums insured and estimated rebuild costs. This highlights the scale of the challenge and the extent to which many businesses are exposed, should a major loss occur.

Underinsurance: from hidden risk to visible claims problem

More than two‑thirds of brokers (68%) say they remain concerned that some of their commercial clients are underinsured. This proportion hasn't changed compared to last year, highlighting the stubborn persistence of the issue.

Underinsurance is also creating real pressures for customers, with brokers reporting that 56% experience financial strain when claims fall short, and 37% face operational disruption. In more serious cases, brokers say 26% of clients have seen their business close, with 20% reporting job losses. The personal impact is evident too, with 21% noting a lasting effect on clients’ mental health.

Brokers recognise responsibility...

Brokers increasingly see their role as pivotal in fixing the industry‑wide challenge of underinsurance, with 87% agreeing they should proactively address it (in 2025: 80%).

However, only a minority of brokers are talking to their clients about sums insured ‘regularly’ (24%), with most doing so only ‘sometimes’ (60%), and some ‘rarely’ (14%). This gap suggests practical barriers continue to prevent underinsurance being addressed consistently.

… but also call on insurers for support

Many brokers also want more support from insurers, recognising that we’re stronger when we work together to address pressing industry challenges. More than one-third (36%) of brokers say help in detecting and correcting underinsurance is a key way insurers could improve their service.

In response, we’ve introduced practical measures to address underinsurance, including an automatic 24-month business interruption (BI) cover extension to help make sure clients are better protected as rebuild and reinstatement timelines continue to rise. We've also enhanced our Commercial Intelligence Tool (CIT), using AI and third‑party data to identify potential underinsurance at quote stage across our property products on both Fast Trade and Acturis eTrade platforms.

Awareness, not cost, is now the biggest barrier

Many clients continue to be underinsured for a mix of practical and perceptual reasons. However, it's clear that cost is no longer the main factor driving underinsurance. Last year 36% of brokers cited price as the main factor; that fell to just 29% in this year’s Broker Barometer survey – indicating there is no single factor that'll solve this long-term industry challenge.

The main reasons clients aren't adequately insured

According to brokers, these are the top reasons clients remain underinsured:

• Lack of awareness - 40%
• Failing to understand the impact of inflation - 33%
• Misunderstanding policy terms - 32%
• Belief that "it won’t happen to us" - 30%
• Cost - 29%

This suggests education, not cheaper premiums, will be key to closing the protection gap.

Surveys are key to accurate sums insured

An up‑to‑date reinstatement cost assessment (survey) is often the most reliable way to set an accurate buildings sum insured. Yet brokers say only 24% of businesses regularly commission a survey to determine valuations; 60% do so sometimes, and 14% rarely or never do. Where surveys aren’t used, the risk of underinsurance increases – reflected in brokers’ reports of more claims being reduced or declined when cover falls short.

Jason Chambers, Director of Innovation, Commercial Lines, Aviva, said,

“Underinsurance is no longer just an oversight - it’s becoming an embedded behaviour. At today’s rate of index-only correction of around 4.4%, simply relying on incremental renewal increases can leave customers materially underinsured for 15 to 25 years. We see the paradox clearly: many customers review their cover every year, yet their sums insured continue to fall short of what’s needed.

When that gap persists, underinsurance doesn’t just create financial pressure, it can turn a manageable setback into a far more challenging situation for a business and its people.

Persistent rebuild cost inflation continues to reshape expectations around sums insured, and misunderstandings between market value and rebuild cost remain common. Over time, these factors normalise underinsurance, even when customers believe they’ve ‘reviewed’ their cover.

This is the moment to reset cover properly. Encouragingly, brokers are planning to seize the opportunities presented by the current soft market. With lower premiums creating more flexibility, many are proactively using this window to help customers reassess their cover and close underinsurance gaps. It’s a critical moment for deeper engagement - and we’re stronger together when brokers, customers and insurers tackle it in partnership to strengthen long‑term resilience.

Addressing underinsurance now can be the difference between a claim that supports recovery and one that puts a business’s future at risk.”

_{¹ The research was conducted by Censuswide with 251 18+ general insurance brokers between 23.01.26 - 05.02.26. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles and are members of The British Polling Council.}

_{² Aviva’s supplier BCH provided the mean average for a sample of 839 commercial properties insured by Aviva of over/underinsurance from a 2025 analysis of pre- and post-survey BDV, inclusive of VAT.}