Navigating your renewal: professional indemnity
By Mark Carver
The Solicitors Regulation Authority (SRA) states that the proposals in its professional indemnity (PI) consultation are designed to ‘ensure that regulation is proportionate and targeted’ and to ‘reduce costs for legal services providers and consumers’. The reality is that the proposals will benefit insurers rather than the profession.
Why change minimum terms and conditions when overall the profession has enjoyed low rates? While many believe they are paying too much, premiums have increased by just 4.7 per cent, from £243.9m in 2003 to £255.4m in 2013 (source: Participating Insurer Declared NPW, 2003–13). This is remarkable considering: the doubling of the limit of indemnity; an estimated cumulative fee growth of 50 per cent; the recession; several insurer withdrawals; and our estimate that insurers have made losses in 12 of the past 14 years.
Despite all this, while there have been insurer withdrawals, there have also been new entrants and we believe there will be two in 2014 — a welcome relief for some. However, only five of the original insurers remain active, and the average period of insurers writing solicitors’ PI insurance is four years. One thing is certain, few who enter aggressively end up as long-term players…
Click on the link below to read the rest of the Miller briefing.
Briefings from Miller Insurance Services LLP
Following his two-part series in June, Mark Carver discusses the impact of the SRA reforms on all firms.
In the first of a two-part series, Mark Carver considers the SRA’s proposed changes to the professional indemnity market.