ntegrity insurance solutions limited

Solicitors Professional Indemnity Update from NTEGRITY

Insurers have been expressing their disappointment at the SRA’s new Minimum Terms and Conditions (“MTC’s”) that will apply for the 2011 renewal following the consultation earlier this year.

While they were pleased that the consultation demonstrated that the ‘open market’ approach has been significantly beneficial compared to the Master Policy and SIF, the phased changes in the ARP have caused considerable frustration among Insurers. The continuation of the ARP in 2011 (albeit with a reduction in the amount of time that firms can remain in the ARP – down to six months from twelve) is likely to dampen underwriting appetite among current Insurers at renewal.

Some Insurers reported as considering an entrance this year, have decided not to proceed, although there is still plenty of time for new entrants to arrive.

In 2010 a total of 20 approved Insurers wrote primary solicitors business. Out of the 20, SIMEA has gone into run-off and one other has expressed a wish not to renew its book, leaving 18 options altogether plus any new entrants that materialise. Nearly all approved Insurers target their efforts at particular segments usually based on partner numbers. For firms with less than 4 principals there is an extremely narrow range of options. Fewer choices will make for a sellers’ market and we expect this to be strongly felt in 2011.

Overall, NTEGRITY expects renewal this year to be as difficult as 2010.

We are working this year with the 360 Legal Group, the specialist consultancy that helps law firms to get work, save costs and restructure. 360's range of services are invaluable to law firms faced with a bewildering array of challenges this year. To find out more visit their website.

For 2011 Insurers advise that they plan to:-

• Seek only limited growth to avoid increasing their market share (market share drives the proportion that each Insurer must bear of the Assigned Risks Pool safety net).
• Continue to review their portfolio to minimise exposure in the main areas of concern.
• Charge higher premiums for those exposed to the property market.

What can you do to minimise the effect of market conditions on your firm?

We strongly recommend that you start renewal early, submitting your proposal to NTEGRITY by late July (applications can be downloaded below). Several of the larger approved Insurers do not plan to begin quoting until August but being in the queue early allows you to obtain the widest range of options.

To make the exercise easier for you, NTEGRITY can work using a copy of your existing application but it helps to expedite the process if your form:-

• Is clearly written,
• Explains the history to any legacy or successor practice issues,
• Highlights the steps you take to manage risk actively, particularly with perceived high exposure work such as conveyancing,
• Explains how past claims may have arisen and any preventative action you subsequently took to avoid a repeat,
• Is accompanied by copies of up-to-date certified claims experiences from past Insurers.

Broker costs can add significantly to the overall cost of your cover. For members of the 360 Legal Group NTEGRITY is offering discounted fees.