PI rate increases predicted for Ireland and UK
London-based brokers Miller and JLT have clinched an eleventh-hour deal to secure the future of the Irish solicitors’ professional indemnity mutual fund.
Brokers had been scouring the market for a deal to save the Solicitors Mutual Defence Fund (SMDF), and are likely to have multiple insurers covering the risk, Insurance Times understands.
SMDF chairman Laurence Shields confirmed the deal and said quotes were being sent out to its 3,500-strong membership, but admitted there would be a “substantial” increase in premium.
One source told Insurance Times that this increase could throw the deal with insurers into jeopardy.
“If they find the price has gone up 50%, [Irish solicitors] will be gone. The problem is that nobody knows what they are going to see. If too many leave the fund, it could cause the insurers to pull out of the deal.”
Irish solicitors have until 2 December to find insurance, or face being unable to practise.
Aon and XL Insurance have tied up a deal to provide cover. Meanwhile, insurers AIG, RSA and Quinn will also want a slice of the action.
Lockton will be making a play to place cover. Lockton Dublin’s managing director, Kieran McHugh said: “We have a long-established record, going back to 1952. We will be primarily looking after our own client business and if we can do anything for anyone else, we will.”
Back in the UK market, Zurich is predicting another spike in professional indemnity (PI) rates for British solicitors next year.
Zurich Professional and Financial Lines legal professions manager Jenny Screech said: “The next 12-month period is likely to involve a significant number of high-value claims against solicitors. This is likely to cause rates to harden further next year and capacity could also reduce.
“It will then be even more important for firms to ensure that they have a good relationship with an insurer that is experienced in and committed to this market, that can offer good security and has sound claims and risk management propositions.”
Last week, Insurance Times revealed that the solicitors’ professional indemnity market in the UK was now worth nearly £250m, up from £217.8m a year ago.
This year’s market has been driven by a rapid rise in rates for smaller solicitors firms, as insurers fear a backlash in recession-led claims.
The top newcomers were XL Insurance, which wrote £17.1m of business, and Allianz, which grabbed £10.9m.