MUM chief executive Charles Manchester reveals why he isn’t scared to wade into solicitors’ PI with Pelican acquisition

Solicitors’ professional indemnity (PI) has always been a difficult market, with the risk often placed with unrated insurers to avoid exorbitant premiums.

However, this hasn’t stopped Manchester Underwriting Management (MUM) from snapping up solicitors’ PI MGA Pelican Underwriting from Asta.

While solicitors’ PI can be a “difficult, volatile class”, MUM chief executive Charles Manchester explains that he is confident that Pelican is a good acquisition for MUM.

Firstly, he clarifies, although a large segment of the market is reliant on unrated insurers, Pelican’s capacity is supported by Munich Re subsidiary Great Lakes, which has an AA- rating from S&P and an A+ rating from A M Best.

This means that premiums underwritten by Pelican may be higher, but policyholders do not face the risk of an insurer collapsing.

Manchester gives the examples of failed insurers Lemma, Balva and, most recently, CBL, as capacity providers that underwriters have turned to for cheaper policies and later regretted.

According to Manchester, Pelican’s modest presence in the market reflects its “very cautious” underwriting strategy.

While some solicitors may prefer to get as cheap a deal on their insurance as possible, Pelican’s customer-base shows that there is a “proportion of the profession” willing to shell out more for quality and reliability, Manchester says.

Civil liability bill

The Civil Liability Bill and whiplash crackdown are likely to hit solicitors hard when it comes to income from personal injury cases.

The reforms “may well affect the profession”, Manchester admits.

However, he is secure in his assertions that it will have “next to no” impact on Pelican, owing to its cautious approach to underwriting.

Pelican does not cater to cold-calling personal injury professionals, Manchester adds.

Playing it cool

Manchester explains that the rationale behind picking up Pelican was that it is a good business, with which MUM shares some capacity.

He adds that MUM is “excited” to be taking on Pelican’s “meaningful chunk of business”.

For now, it seems, MUM has no plans to alter how Pelican does business in the near future.

Eventually, he says, MUM might bring “a little more” distribution, but it does not want to share Pelican’s appetite.

It seems that MUM is playing it cool on Pelican. In a tricky market, Manchester hopes that caution and quality will keep it on top.