We chart the market and explain the numbers
The amount of premium in the UK solicitors’ professional indemnity (PI) insurance market has risen by £42.2m this year, with £255.7m of premium written for the 2011-2012 year compared to £213.5m the year before, according to Capita figures seen by Insurance Times.
This means that written premiums for the 2011-2012 year are the highest since records were started in 2000.
Some of the rise can be attributed to the SRA crackdown on the minimisation techniques some insurers used last year to underdeclare how much premium they had written.
These techniques exploited loopholes in the Qualifying Insurers’ Agreement to reduce insurer exposure to punishing assigned risk pool (ARP) costs, which are worked out according to insurer market share.
Market sources said this practice exploded in the lead-up to the 2010-2011 renewal, leading to an apparent multi-million pound reduction in the size of the market.
Declared premium for 2010-2011 was only £213.5m, whereas the premium for the year before was £241.4m.
The SRA reworded the Qualifying Insurers’ Agreement earlier this year to remove these underwriting loopholes.
XL is the insurer that has written the most solicitors’ PI insurance for this year, with £46.7m of premium and an 18.2% market share.
Last year XL wrote £28.4m and was the third-largest insurer in the sector.
Inter Hannover was still the second-largest insurer, writing £31.9m of business compared to £30.7m the year before.
QBE wrote £30.1m in the sector, up from £17.5m the year before.
Solicitors’ PI insurer market share for 2011-2012
1. XL Insurance, 18.28% = £46.7m
2. Inter Hannover, 12.51% = £31.9m
3. QBE Europe, 11.78% = £30.1m
4. Travelers Insurance Company, 11.60% = £29.6m
5. Zurich Professional, 9.41% = £24m
6. Chartis Insurance, 8.87% = £22.6m
7. Allianz Global, 5.77% = £14.7m
8. Libra Insurance Services, 3.49% = £8.93m
9. Alpha Insurance, 3.36% = £8.6m
10. Aviva, 3.33% = £8.52m
11. ERIC, 3.26% = £8.33m
12. QBE Syndicates 1186 and 386, 1.71% = £4.38m
13. W R Berkley, 1.46% = £3.75m
14. Liberty Mutual, 1.33% = £3.4m
15. Enterprise Insurance, 1.14% = £2.92m
16. First Title, 1.07% = £2.75m
17. RSA, 1.07% = £2.74m
18. Chubb, 0.34% = 875k
19. Pembroke Syndicates, 0.15% = £406k
Total solicitors’ PI total premium declarations for 2000-2011