While it is still unclear how many firms entered into the extended indemnity period (EIP), there was no significant reduction of insurer appetite
This blog post was also featured as a column in the December 2014 issue of Legal Practice Management magazine. To read the issue in full, download LPM magazine.
In comparison to previous years, the 2014 solicitors professional indemnity insurance (PII) renewal passed without significant drama for the majority of firms.
While it is still unclear how many firms entered into the extended indemnity period (EIP), there was no significant reduction of insurer appetite to write business, and many sought to grow their portfolios.
The main movement of business appears to have been from firms seeking to move from unrated to A-rated insurers – driven either by the holding broker or by the firm with a worry about panel requirements for lenders.
There were also several new A-rated insurer entrants to the market, which would suggest that there is now more comfort surrounding solicitors PII in general.
First, this could be a result of the diminishing influence of unrated insurers on the market, and second, due to favourable economic conditions, especially in respect of interest rates and a blossoming property market.
How long these conditions last remains to be seen and it would be wise for all stakeholders in the solicitors’ PII market to keep a watchful eye on interest rates over the next few years.