A recent law society survey has revealed that PII premiums are set to rise again this year. It misses the point however, that those premiums are based upon last year’s financial results, and many firms are currently seeing reductions in turnover. As a result, the proportion of the premium to the firm’s income is likely to rise even more.
Whilst there is likely to be one new Insurer entering the market and easing the pressure on capacity, at least one brand name will also disappear, and therefore there is no immediate let up in the upward rate pressure.
The survey states;
- PII premiums will rise again this year.
- Last year the average increase was 12% across the market.
- Those handling conveyancing work saw a 25% premium hike.
- As a proportion of turnover, conveyancing firms spent 8% on their PII premiums.
Researchers said that, for the last three years, the PII market in England and Wales and globally had been “hardening at a rate not seen since 2001/02”, with reduced capacity, limited competition, increasing premiums and “insurers taking a highly selective approach to the risks they choose to cover”.
Lubna Shuja, president of the Law Society, said: “Although stability is returning to the market, the process of buying PII has become harder – with more paperwork involved and underwriters showing greater aversion to risk. We advise firms to start budgeting for increased premiums and perhaps consider premium financing as a way to spread costs through the year. We also recommend firms start the renewal process early; around three months before your renewal date.”
There are ways to moderate PII premiums in the medium term for most law firms, however many are relying on a commoditised approach to sending in a proposal form and hoping for the best in terms of what comes back.
If you would like to understand how to surpress your premiums whilst also improving the scope of your protection – contact us on 020 376 0990 or email email@example.com.