Insurers and brokers have been exposed as inept after making countless of counter-productive sales pitches to solicitor firms for their professional indemnity premiums, finds a report.
The Pelican Partnership has discovered solicitors in England and Wales are being inundated with approaches from the insurance community in the run-up to the new open PI market in September.
But that most of the pitches have so far 'fallen on deaf ears' because the insurance industry appears to have a poor understanding of solicitors' needs.
In one case, a barrister firm received a mail-shot from a broker touting for business, despite the fact it is not involved in the Law Society's changes. But most complaints mainly stem from the insurance industry's blinkered approach in wanting to sell products rather than building long-term relationships.
Solicitors are often still in the dark about what the changes will entail in the new environment and there was anxiety among firms with poor claims histories as to what the open market will mean to them.
"It is a rare moment for the insurance community to have the opportunity to develop a new market and I am surprised by the lack of innovation so far," said Pelican managing director Francis Wyburd. "It would seem their marketing model involves pouring money into flogging products rather than seeing this as an opportunity to start a sustainable and productive relationship."
About £250m worth of premiums will be up for grabs in September following the decision by the Law Society to scrap its mutual fund, the Solicitors' Indemnity Fund, which enjoyed a monopoly on the first million pounds of a firm's PI cover.
The St Paul has won the contract to run the Law Society's scheme but can expect fierce competition from a number of other players.
Wyburd says the report shows that there is yet no clear winner for the business, but that solicitors' do expect premiums to drop, contrary to a report by Aon last month.
He adds: "The industry is following a typically product oriented model and as a result are showing themselves less interested in the 'consumer' and more interested in their GWP.
"But then understanding customer needs has always been a challenge for the industry."
