Professional Indemnity Insurance
In 2018, the review by Lloyds of London sent ripples through the Professional Indemnity Insurance (PII) market. The review confirmed that UK PII has been unprofitable, for most insurers, for many years, making it the second least profitable class at Lloyds. As a result, Lloyds issued an ultimatum to all syndicates that underwrite PII that they need to put their house in order and put in place an action plan for loss-making PII portfolios to return to a sustainable profit.
Written on 3rd May 2019
As a result, several substantial Lloyds Syndicates have chosen to exit the market altogether and more syndicates are expected to pull out of writing PII and move capital to more profitable classes before the end of the year.
So where does this leave the market?
In short, as those Underwriters remaining in the market look to adjust their portfolios and change their previous appetite towards this class of business the outlook is bleak. The reduced capacity is becoming an issue and buyers are staring down the barrel of increased premiums. Some firms are finding it difficult to obtain competitive terms and the position is further aggravated by reduced excess layer capacity, which means that those firms that buy additional coverage are likely to be asked to pay more.
What can be done?
As a prudent Insurance Broker, we have no choice other than to prepare our existing professional clients for potential increased premiums in 2019 and many of the 300+ UK Surveying firms that we act for will not be immune from these premium increases.
However, Franklands Insurance & Risk Management’ clients will benefit from having support as they plot their way through this particular minefield.
The Lloyds review has signalled the abrupt end to one of the longest soft PII markets on record and many PII Brokers have never operated in hardening market conditions. The team at Franklands have specialist PII brokers with track record and experience in sourcing a tailored solution to meet your needs. We are highly respected in this sector and have many longstanding insurer relationships.
If you are an existing client your next renewal will be challenging, but rest assured, we will support you to achieve the best terms possible from the market.