How did October 2023 Solicitors PII Season go?
Published: Monday, 9 October 2023
Have we reached 'peak' premiums?
The market is showing signs of softening
This is my 23rd renewal season working with Solicitors Professional Indemnity Insurance, having seen every year since the move to the open market from SIF (bar two) and in so many ways I feel we have been here before. This market is notoriously cyclical and there is a sense of déjà vu with the same mistakes being made without the lessons being learnt. The majority of firms still renew on 1st October.
Good news for firms who manage their risks well
The recent October 2023 renewals demonstrated that we may have reached the peak of premium increases for now, with significant new capacity just arriving or very clearly on the horizon. New Insurers mean greater competition, and greater competition will inevitably mean reducing premiums for those firms that have earned the right.
What do I mean by “earned the right”? I am referring to those firms who clearly take the management of their business and the management of risk, within that business, seriously. The fact that you are reading this probably indicates that you are one such firm. It is those firms that will never read this that will miss out and face the prospect of 'fingers crossed' renewals.
What does a “good” firm look like to insurers?
- Works within the areas of practice and geography it's staff understand, can service and have the expertise for.
- Is financially sound and viable.
- Takes risk management very seriously.
- Has systems that help rather than hinder the provision of quality service to customers.
- Has an open and inclusive culture supporting collective and individual growth.
- Manages claims and learns from any mistakes.
- Understand where claims could come from and pro-actively addresses the concerns that Insurers might have.
A “good” firm takes the trouble to explain the above comprehensively and accurately to Insurers. There is no excuse these days for a shoddily filed out proposal form that looks rushed and is incomplete with mistakes. The wrong box ticked or a figure missing can put an underwriter on alert. You are asking for cover for “negligent acts, errors or omissions” so don’t make them here! The firms that always do best from a “softening” market are those that can talk directly address insurers' concerns and demonstrate how they manage those issues within their business. This year was no exception.
Insurers are less likely to take a chance if they have any reservations about a practice
I do not think I have seen a climate where insurers are more inclined to not offer renewal terms, even if this means that a firm enters run-off with that insurer, than now. There is far more of a zero-tolerance attitude to poorly run firms who ignore the need to stick to what they know and fail to manage their business sensibly. Insurers have the ability to close a firm within 90 days and seem far more willing to use that power than before.
The message from this renewal period?
Better premiums are on the way for well-managed firms! Make sure your firm is positioned to take advantage of improving market conditions.