The solicitors' professional indemnity (PI) market is "fundamentally under-priced", research by Zurich Professional has revealed.
Jeremy Alwyn, sales and operations director for Zurich Professional, said: "Solicitors' PI premiums are still below the levels of the final year of the SIF [solicitors' indemnity fund], and the market as a whole needs to go up by about 15%.
"This is in keeping with what the solicitors themselves predict."
Zurich's research found that solicitors predicted an average increase of 13%, with a third expecting rises of up to 10%, and one in 10 foreseeing a 20% increase.
But Alwyn added: "It is still too early to say for certain how much the market will rise as very few insurers are providing terms at present."
He said the doubling of the minimum indemnity limit to £2m had contributed to the current tough renewal market. "No matter how small a solicitor firm is or the type of work it does, providing £2m worth of cover as opposed to £1m equals more risk and greater costs for insurers, which will push up [renewal] prices accordingly."
The mutual SIF, which previously had a monopoly on the first £1m of a firm's cover, was scrapped in August 2000, opening up an estimated £250m in premium to the open market.
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