Greater competition between professional indemnity insurers has improved capacity and suppressed price increases, insurance brokers have told a Gazette roundtable discussion.
There is, they said, a softer market both for compulsory cover and the ‘excess layer’ of additional insurance many firms choose. ‘For the first time, certainly in the last three years, these insurers have now got new business budgets to hit,’ Zarina Lawley of broker Miller said. The result is that insurers are asking brokers: ‘How can we grow?’
There was an expectation that a property downturn would result in fewer claims against conveyancers than in previous downturns. ‘The criteria are so much stricter,’ Lawley said. ‘The lending is much more responsible. Also, the way that law firms conduct conveyancing has obviously changed.’
Comparatively benign market conditions are confirmed by research from accountancy firm Hazlewoods. It found that the number of firms having to close due to difficulties in obtaining PII cover fell from a high of 65 in 2019/20 to 34 in 2022/23.
For clients that renewed in October 2023, Hazlewoods said two-thirds saw their premiums fall on the previous year.
Ian Johnson, partner at Hazlewoods, said: ‘Law firms will be very glad that PII premiums appear to have begun to soften – some firms had been finding coverage difficult, even at very high prices. It’s still a very tough market for firms that insurers see as higher-risk – such as those that handle larger volumes of conveyancing work – but for others the cost of PII appears to have settled somewhat.’
Today’s roundtable on PII can be read here.
