Growth in the professional risks market could be a boon for insurers, argues Tom Flack
In the last two months a slew of insurers including Allianz, ACE, Markel and Chubb have rolled out new and enhanced covers for professional risks.
Given the essential differences between most commercial and financial organisations, getting a wording appropriate to the risk is key.
So too is getting cover in the first place. It is estimated that the majority of the UK’s four million SMEs do not have adequate cover for professional risks.
Into the breach this roving band of insurers is stepping.
R&SA’s Profin has said it will grow its business by 20% within 18 months, Marsh has unceremoniously poached AON’s PI team, and Liberty International Underwriters is developing an online “quote and buy” system for brokers for its D&O and PI products.
These changes are the result of legislation and evolution. As more private companies have external interests, and external pressures from new regulations intensify, the need for more specialised forms of cover has increased.
The PI market is estimated to grow by 50% to £2.3bn by 2010.
The D&O market, currently standing at £600m, could double in size within five years. Enquiries are up by 16% year on year, despite the market for such cover among larger companies reaching saturation point.
And while “SME” is very much the order of the day, insurers, including Allianz, are targeting the mid-corporate sector.
The problem is that the growth in professional risks cover is uneven. Insurers provide both stand-alone general liability offerings, and combined covers as part of existing packages.
There is some concern that brokers are not entirely aware of the subtle distinction between such precise policy wordings.
So it remains unclear if this influx of players into the market will be good or bad news for policyholders.
What is clear is that it could spell rich pickings for insurers. And with that, come vast opportunities for brokers as well.
