Premiums from solicitors' PI renewals drop by £14m as AIG sees biggest increase
Hiscox has seen its solicitors' professional indemnity (PI ) book slashed by over 80% following an attempt to increase rates in a fiercely competitive renewal season.
Premiums written by Hiscox through its syndicate and FSA-regulated company fell to £2.9m from £16.9m in the previous year, according to figures confirmed by the Law Society.
Its market share fell from 7% last year to 1.3% this year.
Gary Head, Hiscox underwriting director, professions, said: "We felt the market needed to see an increase in rates and this view was reflected in the noises from the larger companies.
"We tried and we lost the business to pricing that was competitive."
He added: "The industry has increased the indemnity to £2m from £1m, essentially giving a two-for-one, which I do not think is adequate cover and in time will manifest in underwriting losses."
AIG Europe saw the largest increase in premium volumes, compared to rivals.
The insurer saw a 21% increase in its solicitors' PI book, writing £20m in premium compared to £16.5m the previous year.
This amounted to 8.8% of the Assigned Risks Pool, which is valued at £234m.
Meanwhile, newcomer Liberty Mutual Insurance secured 1.5% of the market, the equivalent of £3.5m in premium.
Heavyweights such as Zurich and St Paul Travelers experienced a drop in market share, despite the industry increasing indemnity limits to £2m from £1m.
However, Zurich still maintains a stranglehold on the market with a 22.6% share - down from a 24.2% share in the previous year.
QBE had the second highest share at 15.7 %. St Paul Travelers reported a 14.5% market share, Norwich Union 8.2%, Royal & SunAlliance 6.6%, and WR Berkley Insurance 5.3%.
Preliminary figures show that total premiums also decreased by almost £7m from last year.