I seem to recall telling some people that the abolition of the ARP and the increased likelihood of new entrants to the market was going to make the 2013 Solicitors PII renewal season a bit easier. I must be barking!
Whilst it’s certainly true that some firms have found insurers willing to offer early renewal terms this year, particularly for larger firms, this is indicative of the fact that they are deemed to be attractive risks to insurers.
For firms who are deemed less attractive, either due to the profile of the firm (number of partners and mix of disciplines) or adverse claims issues, the market is still a tricky one to predict.
The Law Society’s recently published Frequently asked questions makes reference to the fact that XL are pulling out of the 1-3 partner segment of the market and also that this segment is currently dominated by unrated insurers, making for some particularly difficult decisions for this size of firm.
So the question is, if you have renewal terms already should you renew now and save the hassle later?
As ever the answer to this question is not a straight forward one and is dependent on a number of factors: –
- Does the insurer have a financial security rating in the UK?
- How long have you been insured with them?
- What has their service been like?
- Are their terms competitive?
Our recommendation would always be to build up a good long standing relationship with a broker/insurer, thus enabling both parties to take a bit of the rough with the smooth over the years as inevitable issues arise. If you have such a relationship and you are reasonably happy with the early terms put forward, why go through the stress and hassle of obtaining alternative quotes and delaying the process. Renew early and move on to running your business.
If this is not the case and you are unhappy with the insurer or the terms they have put forward, the question is how to go about obtaining alternative terms. I see from the aforementioned Frequently asked questions that the Law Society recommends sending out your proposal form to all of the available insurers in the market for your size of firm. In our opinion this blanket approach represents a significant risk of turning insurers off, who after all see hundreds if not thousands of proposal forms.
With a bit of careful consideration and advice from a broker who understands the market, you can quickly glean what sort of premium you should expect to be paying and which insurers would be willing to underwrite your firm. After all, the number of partners in your firm is not the only criteria insurers use to determine their quotation. By showing your proposal to carefully selected underwriters on a 2 or 3 year cycle and managing risk very carefully, you will find yourself in a far more favourable position with insurers and have more stability of premiums in the medium to long term.
If you would like to know more about how we manage Solicitors PII renewals please click here to contact one of the members of our solicitors team.
By Sam Leeder