Recession driven claims environment making for tougher Professional Indemnity Insurance market (June 2009)
Financial market volatility is impacting the professional indemnity insurance market and there is clear market hardening in segments like surveyors and valuers with the expectation of more to come for solicitors and other professionals later in 2009.
Some professions such as valuers and solicitors involved in the property market are already being targeted in a systematic way by lenders. The effects of recession mean that it only a question of time before accountants, construction professionals and investment advisers become a target as businesses fail, the value of investments fall and building projects yield less than expected.
A new potential feature for professionals to consider is the extended use by claimant solicitors of conditional fee arrangements ("no win, no fee") backed by After the Event legal expenses insurance into the professional negligence arena. If this takes off in a big way, the risks of launching litigation to the claimant will fall with an inevitable upsurge in claims activity.
Claims - the early warning system
While insurance market hardening is seen clearly at renewal when insurers seek higher premiums and restricted cover, the early warning signs often appear first in the way claims are handled.
When the market pendulum starts to swing against customers, Insurers tend to raise more objections to claims and look for more information which serves to slow the process of payment.
The cost of claims handling itself comes under greater scrutiny and often changes are made by both Insurers and brokers for example outsourcing work to claims specialists or solicitors. These arrangements are invariably cost driven and rarely result in enhancing service to the end user. Work outsourced to a solicitor can end up being handled by cheaper fee earners with limited experience, sometimes questionable independence and with little focus or interest in settling disputes with minimal impact.
Some brokers lack the expertise to make a difference in representing clients on claims. Other brokers have been reducing their involvement in claims handling to perhaps concentrate on sales or reduce costs by setting up outsourced arrangements just at the very time in the insurance cycle that clients need support that is clearly on their side.
Overlooking the way your claims may be handled when buying the policy can cost you
The approach to claims and the handling process adopted by both brokers and insurers is usually overlooked when the policy is being first set up or renewed but clients could find that what looks like an attractive price structure leaves them with very little help when a tricky dispute rears its head.
NTEGRITY provides its clients with enhanced value through its dedicated service and is totally committed to providing complete consideration of its client's needs, the highest standard of care and full support at a time when it is most required. "I just wish to thank you for all your successfulwork on our behalf, and to say how much it is appreciated" Solicitor based in Chester
For more on how NTEGRITY's claims service can help call Tara Price on 0845 638 3278