Deadline time: the state of play in solicitors' PI

Brokers claim they are seeing some of the most competitive quotes ever for solicitors’ professional indemnity (PI) this year as the 1 October renewal deadline approaches.

A number of insurers have been beating their rivals on price by up to 60% on quotes, as the competitive pricing by some insurer entrants has been the hallmark of this year’s renewal period, according to brokers.

“We have seen some huge reductions for two to nine partner firms, ranging from 10% to 60% depending on the firm size and partner numbers,” according to Clear Insurance Management professional risks director Daniel Innes.

“The largest reductions have been in the £70K to £150K premium bracket,” he added.

The competitive pricing, which has helped hard-up solicitors find financially manageable premiums, has come from some of the new entrants into solicitors’ PI.

However, several brokers will not place business with insurers that do not have a financial rating from a rating agency.

“I think this year’s story is all about how innovative capital is coming to dominate the space in the lower end,” UIB divisional director Simon Lovat said.

Brokers believe the renewal period has been calmer this year, compared to the typical stress of renewal time in the past.

Last year saw some brokers working 16-hour days to place clients as they scrambled to find cover for policyholders of Quinn Insurance, which dropped out of the market.

Another factor in the relative calmness is that many insurers have been providing longer underwriting periods this year, according to Lovat.

“There is a want in the industry to start the process earlier. It’s about trying to stop the last week panic,” he said. “It’s the calmest year we’ve ever had.”

He also predicted the number of firms in the assigned risks pool (ARP) was likely to fall after the renewal because of increased appetite from newcomers to the market.

The solicitors’ PI market saw a lot of churn from qualifying insurers coming and going this year.

Entrants to the market were Enterprise Insurance, European Risk Insurance Company and First Title.

Gibraltar-based Enterprise wants to write between £8m and £10m of premium through broker Monitor Insurance Services.

However, this year also saw Chartis UK stop writing new business to concentrate on renewals, and Aspen Insurance will only be writing excess layers.

Chartis was the biggest insurer in solicitors’ PI last year. It wrote £38.5m of business and had an 18% market share. Aspen wrote £1.15m of solicitors’ PI business last year, with 0.5% of the market share.

Additionally, Elite Insurance withdrew plans to write solicitors’ PI because of the continued existence of the ARP.