There are changes afoot within the professional indemnity insurance market and PI premiums…
Much has been made of the Grenfell tragedy which looks set to trigger significant claims and payments within the insurance market. The professional indemnity insurance market has never been fully comfortable with cladding exposures and, unfortunately, the horrific events surrounding Grenfell confirmed all worst fears.
However another key influencer is the recent Lloyds review of the business written within its market. It found that the results around professional indemnity have been found wanting….
In the last 6 years Lloyds has made a loss of £435m from professional indemnity.
What does this mean? It means that Lloyds will need to take some corrective action.. This action will take the form of reduced appetite and capacity within Lloyds for professional indemnity. Which means the suppliers of insurance will shrink in 2019. Basic economics will then kick in. If supply reduces and demand stays the same then prices will go up.
We are already seeing this happen within certain areas of professional indemnity – principally within construction.
What else might you expect?
Well, things may get a little more difficult. Construction exposures will be interrogated a little more closely, more underwriting questions will be asked, limits offered by single insurers are likely to reduce and the cost of higher limits is likely to increase.
So what’s the good news?
There is still appetite for well run businesses with good experience and track records. For these types of business there are still deals to be done…. If you know where to go to!
And if you don’t know where to go to…?
Well… that’s where we can help!
Call us on 033 33 448 535 or email me on zahid@custodianinsurance.co.uk
