Alexander Forbes estimates that solicitors in England and Wales have saved approximately £95m in 2000 by scrapping the mutual fund they had for the first £1m of professional indemnity (PI) cover.

The brokers say the overall market value has fallen from £258m in 1999 to £163m in 2000.

But it warns that this drop reflects competition and the dash for an early market share rather than the improvement in claims experience and the adoption of new stringent risk management controls.

There were 35 insurers that entered the new PI market, 21 of them syndicates at Lloyd's, with Zurich and St Paul grabbing the lion's share of premiums.

The latter won the right to run the Law Society scheme and subsequently underwrote £50m premiums alone.

Many solicitor firms complained that they were receiving wildly different quotes for PI cover from the various insurers, leading to speculation that some would later pay a heavy price in claims.