Exodus Continues As Another PI Insurer Escapes Hardening Market
Law firms and abandoned solicitors have been left reeling after their Personal Indemnity Insurance (PII) provider made the decision to leave the PII sector six weeks before many pending policy renewals trigger.
Aon notified their customers via a letter on August 30th, leaving few reasons why they were stopping their PII cover.
Instead, the company intended to help honour their customer’s impending renewal conundrum by passing their details to ‘The Professional Indemnity Company (TPIC), a firm (AON) have worked closely with for the past eight years.’
Aon’s withdrawal from the market marks the ninth in recent memory, but could be the largest supplier to leave. In the past, PII providers Aspen, Brit, Pioneer, Libra and Hamilton have all fallen because of difficult market conditions.
Over recent months, there has been increasing speculation that the Personal Indemnity Insurance Market is beginning to harden, meaning that prices could be on the rise and coverage restricted.
The legal sector is beginning to see firm evidence of these two outcomes, with some insurers withdrawing from the market altogether. The Lloyds Group’s London based firm ‘Libra’ announced that they were leaving the market at the start of the year and before the March renewals due to unfavourable market conditions.
Many law firms are also preparing for a hardening market by locking in longer insurance term policies. Last year the Law Society revealed a trend with 24 month polices rising from no take up in 2016 to 5% in 2018.
As the PII exodus continues, law firms and potentially thousands of lawyers will become anxious about what they can do following a stranding just six weeks prior to their renewal date.
With a lack of new entrants and the possibility of further reduced capacity, it is likely that existing insurers will increase premium rates further, creating a very uncomfortable environment for the legal sector.
For conveyancers, recent statistics, provided by Search Acumen, suggest that total conveyancing volume fell by 10% on a quarterly basis and 20% since 2016. When cashflows are dwindling, difficulties in obtaining PII will destabilise the market further.
A statement made by Ion, said:
“Aon UK Ltd provides professional indemnity insurance broking and advisory services to solicitors firms of all sizes. A number of insurers are withdrawing from the solicitors PI market including Maven Underwriters. A number of Lloyd’s capacity providers who have previously supported the Maven MGA have withdrawn their capacity as part of the Lloyds profitability review.
“Aon has negotiated with alternative insurers and partner brokers who specialise in PI for solicitors to ensure that all existing Aon/Maven clients with cover lapsing on 30th September 2019 are offered a renewal strategy that will deliver the very best terms available in the market. Aon continues to provide sustainable insurance solutions for all of its clients in this sector.”
How worrying is the current state of the PII market for conveyancers?