Revealed: solicitors' PI market breakdown 2011-2012

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.