What Wren’s exit tells us about the professional indemnity insurance market

Nearly nine years on, the repercussions of Grenfell are still rippling through the construction and insurance markets. The latest tremor came a couple of weeks ago when Wren – the mutual insurer specialising in professional indemnity insurance (PII) for architects – announced that it will stop underwriting new business and close down.

The decision follows a surge of cladding-related claims after the Grenfell Tower disaster, which led to what Wren described as a “significant number” of members leaving after a supplementary cash call in March 2025.

Wren is conducting a managed, solvent withdrawal and has set aside a £28m contingency pot to cover liabilities and ongoing claims. Those currently insured should therefore be protected. But the architectural practices that relied on Wren will now have to seek cover in the commercial insurance market instead - a market that, as many consultants know, can be fickle at the best of times.

Wren was a creature of another era. Founded in the 1980s by architects seeking better-value cover, it was a mutual built on the simple premise that the profession could insure itself. For decades it provided a relatively stable home for practices that wanted both insurance and a measure of professional understanding from the people underwriting it – though it wasn’t the cheapest.

But the post-Grenfell insurance landscape is a far harsher place.

By the time Wren announced it was closing its doors, it was clear the mutual could not charge enough in premiums to keep pace with the volume - and scale - of claims

By the time Wren announced it was closing its doors, it was clear the mutual could not charge enough in premiums to keep pace with the volume - and scale - of claims coming through. Unlike the big composite insurers, it could not spread its risk across multiple markets or lines of business. Wren had just one field to operate in: architects’ professional indemnity.

At the start of 2026 it insured around 60–70 practices, including many of the UK’s leading commercial architectural firms, representing roughly 20% of the profession’s total fee income.

So when an insurer like that disappears, it matters.

The obvious question is whether this is simply the end of one specialist mutual - or a sign of deeper strains in the professional indemnity market.

In the immediate aftermath of Grenfell, securing PII cover for anything involving cladding became extremely difficult. Exclusion clauses appeared with remarkable speed. Entire categories of work suddenly became untouchable. Premiums rose sharply for consultants and contractors alike, pushing some firms to the brink and forcing others to scale back the work they were willing to take on.

Since then the market has softened. Higher premiums attracted new insurers, and over the past couple of years cover has become easier to obtain again - at least on the surface.

But the fundamentals remain uneasy.

Insurance markets tend to move in cycles. When premiums rise, new entrants arrive and competition pushes prices down again. When claims begin to climb, the pendulum swings back the other way.

Some insurers are warning that premiums are drifting downward just as claims are starting to rise

Some insurers are warning that premiums are drifting downward just as claims are starting to rise - partly because developers are seeking to pass the cost of recladding back down their supply chains. You don’t need to be Mr Micawber to see that those maths aren’t sustainable

And the claims pipeline is far from empty.

As of the end of February, only about half of the 4,310 buildings identified by government as having unsafe cladding had even started remediation work. Thousands more projects will move through the system in the coming years. Each one carries the potential for disputes about responsibility - and the possibility of fresh insurance claims.

There is also a quirk of professional indemnity insurance that makes the picture even more complicated. Claims-made insurance means that it is the insurer that is covering the firm when it becomes aware of a problem that must pay any resulting claim, not the insurer that was covering the firm when it did the work. .

Which means the real financial reckoning for the market may still lie ahead.

If that happens, the pattern is a familiar one: insurers tighten their terms, exclusions quietly return and premiums begin to climb again.

The regulatory landscape has also added new layers of complexity. The Building Safety Act introduced a new dutyholder role - the principal designer - which the Health and Safety Executive originally envisaged would be taken on by architects. In practice the role has often been handed to specialist third parties instead

The result is a thicket of responsibility matrices, disclaimers and contractual carve-outs that design teams must now navigate carefully to ensure their insurance still covers the decisions they make.

As one architect put it recently: We can’t do any fire design work now - not even make the tiniest decision.

As one architect put it recently: “We can’t do any fire design work now - not even make the tiniest decision.”

For many architects, Wren helped navigate precisely these kinds of risks. As well as providing insurance, it offered guidance on contracts and quietly steered members away from signing up to clauses that transferred excessive liability onto designers.

Among the most problematic is joint and several liability.

Under this doctrine, a claimant can pursue any one party involved in a project for the entire loss - regardless of how small their share of the fault might have been. In a sector where companies rise and fall with the economic cycle, that can leave the last firm standing carrying the whole financial burden.

The risks have only grown since the Building Safety Act extended liability periods for certain historic defects. Claims can now reach back decades. A consultant who played a relatively small role on a project long ago can suddenly find themselves facing a claim for work completed in another regulatory era, sometimes with other parties no longer around to share the load.

For insurers, that creates a particularly awkward problem. They cannot simply assess the quality of the firm they are insuring; they must also consider the possibility that their client could end up paying for someone else’s mistakes.

It is one reason professional indemnity insurance has become so volatile. When insurers cannot easily measure the size of the risk they are underwriting, they tend to respond in the only way they can: by charging more for it - or by stepping away altogether.

Many insurers and industry bodies have long argued that the system should move towards proportionate liability, where each party is responsible only for their share of the blame. Client groups have generally resisted.

In a separate development, the government has recently announced plans to ban cash retentions in construction contracts as part of wider payment reforms. Tackling that scourge is long overdue. But perhaps joint and several liability should be next on the reform list. Insurers are unlikely to vanish like Wren, but until risk is shared more fairly, the insurance market will remain dysfunctional - punishing premiums, tighter terms, and cover that is harder and harder to come by.