While Zurich denies cutting out brokers
The first signs of a price war in the professional indemnity (PI) market are beginning to appear, brokers report.
Months of drought conditions in the sector have left insureds desperate for cover and brokers working all hours to place risks.
Worrying numbers of construction firms, solicitors and accountants have been reported to be without cover.
But brokers say a change is underway in at least one key sector - solicitors - with major players competing on price.
The solicitors' PI market is dominated by St Paul, Zurich and QBE.
One senior London Market figure described how a big law firm moved between two of the top insurers for a "six figure saving". He added: "They are competing for new business, but trying to keep up rates for existing clients. This is only happening in the solicitors' sector and only for good, well-managed risks."
Nevertheless, he said: "We've probably seen the best of the hard market."
Another broker separately described aggressive tactics by Zurich Financial Services which tried to compete by cutting the broker out of the deal.
He told how Zurich lost a solicitor client 12 months ago as a casualty to steep price rises. At the time, the insurer asked if it could re-quote when the risk came up for renewal. When it did so, the premium was lower, but still not particularly competitive.
The broker said: "Zurich wasn't going to win it back, but then went direct to the client and offered something far more competitive. We're not impressed."
A Zurich spokeswoman said the insurer's policy had not changed.
"Our commitment to the broker market can be shown by the fact that we've grown the broker part of the business by 100% over the last year."
The company charged the same net price to direct and broker customers.
"If the broker wishes to build in commission that's entirely their choice," she said. "Zurich is committed to choice."
