If any of you professionals out there or anyone else providing advice for a fee you might want to know what is happening in the Professional Indemnity insurance market over the last year and especially since January 1 this year. The following might help to explain why rates are increasing and cover being restricted.
Continuing losses have resulted in less insurers and those still standing cutting their capacity. Grenfell was the last straw on the PI camel’s back. Losses over the last few years were mounting in other sectors also – Tax/Finance after the Panama scandal and HMRC crackdown on tax avoidance schemes, property valuers continuing to face claims to name but a few examples. The following is a response we got from one of several Lloyds brokers we use:
“HI Craig,
No problem at all.
This basically comes from an exercise within Lloyds which you can read more about here.”
The upshot of this means last year we lost the following syndicates from the PI market place:
- Pioneer Syndicate
- Chaucer Syndicate
- Channel Syndicate
- Aspen Syndicate
- Hamilton Syndicate
- Barbican Syndicate and capacity provided to PI protect MGA
- Canopius Syndicate
All current syndicates have been warned of the importance about writing PI profitably and we are seeing a hardening of rates across most professions but particularly in the construction arena. We would not be surprised to see some markets pushing for 20% rate increases across their various book lines.
These are pretty much unprecedented times for this market. We saw it in the Employers Liability market after Piper Alpha, the Public Liability and Property (and life assurance) markets after 9/11. The losses added by Grenfell are currently attracting a total reserve of around £1.5-2 billion+. There are still some £8bn worth of claims working their way through the system from the Tax Avoidance scandal of a few years ago.
If you have any concerns about your Professional Indemnity insurance cover then feel free to contact McGowan Corporate Solutions on 01428 661950 and speak to Craig McGowan or Sheona Gosney.
Craig McGowan
McGowan Corporate Solution