Daily briefing: Wednesday

As tipped by Insurance Times, Howden confirmed last night that it has bought PI specialist PYV’s legal and IFA books.

The acquisition further entrenches the already strong position of Howden, which is the Royal Institution of Chartered Surveyors’ preferred broker for valuers’ indemnity, in the PI market. It also represents a major consolidation of the PI broking sector, bringing together as it does two of the leading firms in the space.

Both Giles and Heath Lambert are understood to have previously expressed an interest in the Lloyds broker. As part of the deal, a number of PYV staff will join Howden.

Yet PYV has not been viewed as a strong performer over recent years, even though its pre-tax profits were up in its latest set of accounts.

The bigger broker is likely to have been more interested in its new acquisition’s book of business. PYV’s high profile in the solicitors’ PI market is reflected in the Law Society’s decision to select the Lloyd’s broker as the provider of its SafetyNet scheme to help distressed legal firms avoid the Assigned Risk Pool.

Despite the collapse of prominent PI insurer Quinn just over a year ago, the solicitors market is still reckoned to contain an excess of capacity. This has squeezed insurers’ margins, meaning even less is available for brokers’ commissions.

But it’s not all doom and gloom in the PI market. PI is seen as a growth area by brokers working with SMEs, according to a recent Insurance Times survey. Brokers reported that PI was one of the areas where business volumes were significantly up.

And while PYV’s IFA business has suffered, unsurprisingly in the light of the recent financial crisis, its accounts shows that its solicitors’ business was continuing to perform well.

With six months to go until the next 30 September single renewal date for solicitors’ PI policies, the PYV acquisition proves that there is life in even this most seemingly beleaguered of sectors.

David Blackman is deputy editor of Insurance Times.