Focus could shift to before-the-event insurance
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 has not had as damaging effect on legal expenses insurance as expected and could present opportunities for brokers.
This was the message from insurer AmTrust Legal’s underwriting manager Simon Warr and schemes underwriter Marc Wilson in their fringe session on life after Laspo at the Biba 2013 conference on Wednesday.
Under Laspo, success fees and premiums for after the event (ATE) insurance are not recoverable, reducing the usefulness of ATE insurance in facilitating no-win, no, fee arrangements in personal injury cases.
Warr said: “Laspo has had a major impact on access to legal solutions and how our market works, but I don’t think it is quite as negative as it was perceived to be, either for policyholders or insurers.”
The two men said that many of the small, non-complex risks previously covered by ATE insurance could be tackled by before-the-event (BTE) insurance.
Warr said: “There is a huge number of ATE polices that have gone ahead for personal injury particularly where the BTE will have probably covered the risk if the policyholders had looked very carefully at their policies.”
He added that the ability of BTE to bridge the gap for small, non-complex risks would raise awareness of the product. He said: “This is an advantage to insurers and anyone else in the chain. It is going to engender more creative products.”
Wilson added: “As things change and the government starts to erode legal aid even further, there is going to be an opportunity for specialist products to come to market.”
He said that much of the new product development would be driven by brokers, because it is they who are speaking to clients regularly and hearing their needs.
Click here to read the Regulation Report with news and views live from the floor at the Biba conference.
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