The London Market has been inundated with requests to cover Australian professional indemnity (PI) risks as that country's domestic market finds itself unable to cope.

London brokers report millions of pounds of business "falling into their laps" as businesses down-under scramble for cover.

The collapse two years ago of HIH, formerly Australia's second-largest general insurer, and the decision to pull out of the sector by St Paul, have left Australian brokers little local choice.

But they are getting a nasty shock when the London Market quotes prices up to ten times higher than they are used to paying.

David Mercer, director of PI for broker Alexander Forbes in London, said that Australian insurers were seeing prices "going up from three to ten-fold" after a history of "phenomenally low rates".

But business was booming, Mercer said: "It's not the London Market taking advantage. It's just coming back to plausible rates.

"In years gone by we saw next to nothing coming in, as it was all retained locally. Last month my colleague and I put on about AU$2.5m without trying. That's roughly a £1m premium. The inquiries are just falling into our laps."

Forbes may be doing particularly well because it does not have an antipodean presence, so is not seen as competition by Australian brokers.