Could valuers’ PI go the same way as the solicitors’ market?
The valuers’ professional indemnity market has seen its fair share of insurers pulling out of the market because of rates refusing to harden, a rising number of claims and more costly claims.
In the wake of Travelers leaving the market, some brokers say that they are worried about finding cover for all their valuer clients. But if property valuers want a coveted chartered surveyor status, they are required by the Royal Institute of Chartered Surveyors to buy PI insurance.
Getting cold feet
So how serious is the lack of capacity?
Canopius pulled out of the market in October last year and Travelers stopped writing new business in March last year, and renewals last month. However, Torus and AM Trust have both pumped fresh capacity into the market in recent months.
Zurich professional and financial lines manager for south and central, Gail Cook, says she was very concerned about a lack of capacity in the market six months ago. She believes new capacity recently has helped, but the worst is not over. She fears that if interest rates rise, it could trigger another wave of valuation claims, which could lead to more insurers getting cold feet about valuers’ PI.
She says: “There is a feeling that we are far from out of the woods on those claims and there is more for the market to see."
It could be worse
Clear Insurance Management professional risks director Daniel Innes agrees there are problems but says that the new capacity has helped.
“While Travelers pulling out is bad for the market, it is by no means horrific, as there have been new insurers joining,” he says.
He warns that there is still a limited market for insurers interested in surveyors with valuation exposure.
Close call
Innes’ also agrees a rise in interest rates that would trigger house repossessions.
“Without doubt this would result in a fresh wave of professional indemnity claims, not only against surveyors but also others involved in the property transactions such as solicitors,” Innes explains.
So it seems that the valuers’ PI market has avoided the troubles that plague the solicitors’ PI market.
But if interest rates rise, as they are expected to this year, the surveyors’ sector could be rocked by a fresh wave of claims and that could mean it’s back to square one.
