Law Society Gazette reveals PI insurance market shares

According to the Law Society Gazette, more than half of the solicitors’ professional indemnity insurance market is taken up by four professional liability insurance providers.

The Gazzette said that the Solicitors Regulation Authority announced the figures, showing that 18 per cent of solicitor firms secured business liability insurance from provider XL Insurance, while Hannover was responsible for an additional 12.5 per cent of the solicitor firm market.  QBE and Travelers rounded out the last two, with each insurer selling insurance to 11.6 per cent and 11.8 per cent of the industry’s policies respectively.

A total premium income of £255.7 million was generated by October 31, the renewal closing date, reported the Law Society Gazette, with more than 10,900 solicitor firms in England and Wales securing professional indemnity insurance cover.

Meanwhile, the Assigned Risks Pool only admitted 32 solicitor firms who found it impossible to take out the compulsory cover on the open market.  2010 figures for ARP admittance was much higher, with 400 firms finding it impossible to secure cover without the help of the ARP.

SRA chief executive, Andy Townsend, was interviewed by the Law Society Gazette, saying that the SRA found one of the largest challenges it faced was needing to manage the growing number of ARP firms, as it was placing an unfair burden upon solicitor firms who were able to secure traditional cover and preventing the professional indemnity insurance market from being as competitive as it could be.  Thus, the decision was made back in April to address this issue through substantial industry-wide changes, Mr Townsend added.

The chief executive said that the SRA’s reform programme has been working as intended, as evidenced by the recent figures.   The Authority will continue monitoring the effect these changes have upon not only ARP firms but smaller solicitor firms who have heightened vulnerability to insurance premium increases.

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