Law firms renewing their professional indemnity insurance (PII) this autumn can expect premium increases roughly in line with inflation for the first time in years. By 1 October, the traditional renewal date still used by many firms, premium increases are set to average 5%-10%, brokers told a Gazette roundtable discussion. In 2021-22, rates typically rose by 10%-30%.
‘The market’s improving,’ Hera Indemnity’s Patrick Bullen-Smith said. ‘Insurers are now actually wanting to look at new business, want to increase the amount of business they currently write. There are one or two new market entrants.’
Brian Boehmer, at broker Lockton, confirmed: ‘There’s new capacity waiting in the wings.’
Insurers are concerned by uncertainty in the housing market, as claims against solicitors typically increase following a crash. But Miller’s Zarina Lawley said there are two moderating factors that insurers can take comfort from in the present cycle. ‘There’s a lot more control over the lending that banks do,’ she said. ‘And actually, law firms themselves have to follow much more stringent rules when it comes to conveyancing.’
The UK’s annual inflation rate was 10.4% in February, higher than expected.
