No, not the wonderful Alanis Morissette song, but the state of the solicitors’ PII market.
Today we hear of another unrated insurer leaving the solicitors’ PII market. This time it is Gibraltar based “Elite”. Having entered the market in 2012, Elite now say premiums are too low to be profitable. The irony isn’t lost on our broking team here at ProAktive. Unrated insurers have a history of entering the PII market, chasing premiums down and exiting just as quickly when the going gets tough. There is an argument that says any extra capacity and therefore competition in the PII market is a good thing…….it is. But the mess these departures leave behind is unwelcome. Elite gathered a 4% market share at their peak (having only entered the market in 2012). Whilst that percentage is now down to 2.6% there is still a significant hole to fill and whilst SRA rules on PII remain as they are now, there will be few new insurers’ willing to enter a sparsely populated market place.
And then there is the second irony: SRA impose the extremely onerous terms on those insurers who participate in the PII market and yet they allow unrated insurers to participate. This is despite numerous issues and problems caused by these insurers’ over the last few years. In the broking profession we experience regulation via the FCA. It isn’t often I write in praise of our regulator but in contrast to the SRA, our regulator insists that we carry cover with specified minimum levels however it does allow the market to function within parameters that most insurers’ are comfortable with. There, I have said it.
But as ever, all is not lost. With the right advice and a clear strategy, dealing with renewal can be a stress free exercise. Whilst it is only February, we have already met with a number of underwriters and thus when early Spring arrives (the real Spring rather than the one we had in November) we will be ready to tackle the issues. Last year we successfully concluded renewal of almost all our renewals before the end of August.
This will be our objective again this year. Which is why our strapline continues to be……. “freeing you to do what you do best.”
Having started with a musical theme, I can only end on a similar theme so in the words of Whitney Houston, “It’s not right but it’s OK”. Sadly there isn’t a song entitled “For ProAktive Clients”… or is there?
By Ian Laycock FCII, Group Chief Executive Officer.