Daily briefing: Tuesday – Calm in renewal run-up

As the 1 October deadline for solicitors’ professional indemnity (PI) insurance approaches, brokers say the market is less stressful than last year, when some intermediaries were working 16-hour days to place their clients.

Part of the relative calm has come from qualifying insurers opening their books earlier in the year than usual, as well as aggressive insurer pricing and appetite, particularly from a number of newcomers to the market.

With some insurers undercutting rival quotes by as much as 60%, it’s clear that the solicitors’ PI market is still attractive despite perceived flaws, which have already helped deter some previously strong players such as Chartis and Aspen.

Perceived flaws include the continued existence of the assigned risks pool (ARP), which will continue until October 2013, and the single renewal date itself, which will also be replaced in October 2013.

It begs the question of how competitive the market will be after 2013 once these sticking points are removed. One new entrant this year, Enterprise, said a big factor in its decision to join this year was to beat the rush when the ARP is scrapped.

It will also be interesting to see the market breakdown for this renewal, given the churn of market players and the increased strictness over declared premiums from the SRA.

Cobra gets its bite back

Cobra’s decision to sell two broking offices is an interesting one. From the £8.2m sale Cobra will pay off some of its debt and could invest in other areas of its business, according to chief executive Steve Burrows.

“We were basically trying to get rid of interest-bearing debt, improve the balance sheet, and enable us to have cash in the bank to go forward,” he said.

“We’ve been pedalling fairly hard over the last few years just to pay interest and capital back. This gives us the opportunity to pedal hard and actually expand the company.”

Most of the expansion is likely to be through Cobra’s wholesale divisions, including Cobra’s broker network. Burrows said he hoped to be able to relaunch the network in 2012, so watch this space.