Hiscox, QBE and HCC accused of cutting rates in scramble for business
Hiscox, QBE and HCC Insurance Holdings are cutting professional indemnity (PI) rates by up to 30% as they battle for PI renewal business placed via broker Dickson Manchester (DM), according to sources.
But Dickson Manchester director Michael Dickson denied suggestions that a price war had erupted between the three insurers. He said though there may be "individual cases" of 30% rate cuts, prices were generally being maintained.
It is claimed the rate-cutting began after HCC subsidiary DM was defeated by Hiscox in a legal dispute relating to the ownership of the broker's PI business. The dispute erupted after DM announced that a significant amount of its PI renewals, formally placed with Hiscox and QBE, would in future be placed with HCC Insurance Holdings. Hiscox claimed that it was the owner of the PI business and took legal action to force DM to disclose the brokers that produced its PI business. Hiscox won the court case and DM had to name its producing brokers.
Dickson said: "We had an issue with Hiscox about the ownership of the business - we didn't want to give the identity of the producing broker [to Hiscox] but the judge came down on their [Hiscox's] side".
A Hiscox spokeswoman said that risks would be considered on an individual basis and that the insurer would not be "offering discounts across the board".
A QBE statement said the insurer had "maintained the market rate for all of its business."
But Lloyd's insurers have expressed concern about drastic rate-cutting on the part of the three insurers concerned.
"PI rates are being cut by between 20% and 30%," one PI underwriter said.
At the end of last year, the Lloyd's franchise board warned PI insurers that it would stop them underwriting if there was any signs of undercutting on rates.