Solicitors' PI crisis eases as newly FSA-accredited insurer begins trading
Solicitors' professional indemnity (PI) brokers got a boost this week when PI insurer WR Berkley Insurance (Europe) began trading after receiving FSA authorisation.
Earlier this year sources suggested the launch of the insurer could be delayed due to problems securing FSA accreditation.
Consequently, brokers desperate for extra solicitors' PI capacity were concerned that the insurer would not be trading in time for renewals on 1 September.
But the insurer has met the third quarter target for securing FSA authorisation set by backer Stuart Wright.
It follows the announcement that WR Berkley has been assigned a financial strength rating of A (excellent) by AM Best.
"The market needs the extra PI capacity as it has been a nightmare trying to find cover for some
solicitor clients," said one broker this week. "We're currently seeing increases of up to 20% depending on clients' claims records."
A spokesman for WR Berkley Insurance (Europe) refused to reveal how much gross premium income the insurer was targeting, but market sources said it aims to generate over £60m in premium income during its first year.
The new company was established by WR Berkley Corporation (WRBC) and Kiln, and will have an initial capitalisation of £80m, of which 80% is provided by WRBC and 20% by Kiln.
The arrival of new capacity in the market is easing the solicitors' PI crisis for brokers. Last week it was revealed Alea London has an extra £2.5m in capacity available for solicitors' PI cover.