The legal indemnity / title insurance market remains competitive despite some large losses in 2021. Though there are no new entrants in to the market, capacity remains strong with over GBP 2 billion available in the UK and Europe.
Legal Indemnity Market Update


Though rates remained competitive in 2021, we have seen an increase in claims over the past year and therefore expect these to begin to rise in 2022. As increasing claims costs coupled with growing awareness of title issues, in particular rights of light, with firms approaching neighbouring properties who may have a benefit of a covenant / suffering a loss of light. Though this increases the number of claims, generally the claim is quicker and less complex to settle as the third party does not usually want to go down the route of injunction and a fiscal settlement is acceptable. 2021 also saw one insurer pull out of the broker market to focus on direct customers only, though we do not expect to see this shift to be replicated in the market.

Policy Type

  • Rights of Light

    • There have been an increased number of claims and a particularly large claim on a development in central London. This has spooked some insurers into temporary rate increases but we expect this to settle in Q1/ Q2 2022 when there is more clarity. As mentioned, we are seeing “ambulance chasers” approaching adjoining property owners whose light may be impacted. Though the number of claims is increasing, these are generally settled financially rather than threat of injunction.
    • Though we expect any rate increases to slow into the latter half of 2022, we do expect to see an increase in Reactive Agreed Conduct and Agreed Conduct Policies. Insurers are likely to be more vigilant when it comes to requesting updates on negotiations and the commencement of these negotiations. This would not change how generally these policies currently operate.
  • Title to Shares / Real Estate

    • The title to shares market remains buoyant with up to USD 1 billion of capacity. There are however limited insures writing this product. Dual are the only insurer who can provided a standalone title to shares. As CLS and First Title need Real Estate to be attached to the transaction in order to provide cover; due to their binding agreements.
    • Though there is capacity, the limited pool of insurers could create a monopoly. The market is beginning to harden with small rate increases.
    • Though fundamental warranty cover is available, again, this can only be placed by a limited number of insurers. There is a possibility of a new entrant to this market in 2022, which will enhance competition.
    • Title to shares and title to Real Estate cover has remained competitive in 2021, enhancements to cover are usually being included for no additional premium and the availability to include known risks is really where insurers are adding value.
    • The territories where clients are purchasing cover is mainly Eastern and Western Europe and Australia. With Sellers being able to cap liability and not need to stand behind fundamental warranties, we are seeing this product being used as a deal facilitator, particularly where a closed ended fund or risk averse Seller is involved.
  • Restrictive Covenants

    • Restrictive covenants continue to be an area where insurers are cautious. Whilst we have seen more notifications on Restrictive Covenant policies this year, we do not expect to see significant rate increases.
    • Insurers are more willing to provide Agreed Conduct Policies than they have been previously on restrictive covenants. This is dependent on the scenario and also dependent on the beneficiary. Some beneficiaries are well known and actively seeking to enforce their covenants, particularly for new developments. Continued use properties are not being seen as a problem.
  • Mines & Minerals

    • Mines and minerals insurance is an area where insurers are increasingly cautious. This is due to more exposure in the press from cases such as ARC Aggregates Ltd v Branston Properties Ltd 2020 and various other claims.
    • Similarly to restrictive covenants, we have seen insurers able to provide agreed conduct policies where the property owner wants to negotiate a settlement with the mines / minerals owner. This is to enable a known risk to be settled with the comfort that the property owner / developer has a financially secure insurer sitting behind the issue in the event that settlement is not an option.
  • Europe

    • We continue to see competitive rates across title insurance policies in Central and Eastern Europe. Insurers have invested heavily in local teams to build a stronger understanding of these risks and territories that they occur in.
    • In Western Europe, rates remain stable and there have not been any new entrants in the insurer market. There are only a small handful of insurers who can underwrite European Title insurance and even then, not all of them can write in every territory.
    • Building permit risks are the main concern, along with zoning issues and potential ownership issues. We also see a significant amount of title to shares across Europe.

Insurers / Security Rating

Gallagher have a dedicated market management team who ensure that insurer’s financial security is adequate. Given that a lot of title policies are in perpetuity, this is extremely important. We have listed below the financial security of the main providers in the UK:

Insurer Capacity Provider Security Agency Security Rating
Aviva Insurance plc Aviva Insurance plc S&P AA-
MX Underwriting Great Lakes S&P AA-
Dual Asset Underwriting Fidelis
Axa XL Catlin
AM Best
First Title plc   AM Best A
Legal & Contingency Lloyds of London
Legal & Insurance Services Limited Liberty S&P A
Lime Risk Agency Ageas S&P A+
Stewart Title   AM Best A-
Westcor Axa XL Catlin S&P AA-
Zurich plc   S&P AA

Independent ratings from third party rating companies. Correct as at January 2022.

The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher (UK) Limited accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.