Lockton have access to more rated capacity for solicitors Professional Indemnity than any other broker - with access to all 17 A-rated insurers in the market.
Exclusive Access to Inter-Hannover, - and for smaller firms, Liberty Mutual and Endurance
We also have a new exclusive partnership with Endurance Insurance for 1-3 partner firms - helping to fill the void left by XL (and others) last year.
In addition to the various other rated markets Lockton has access to within each firm-size bracket, Lockton has exclusive arrangements with insurers for ALL sizes of law firm:
- 1-3 Partners: Endurance; Inter-Hannover
- 4-6 Partners: Inter-Hannover; Liberty Mutual
- 7-10 Partners: Inter-Hannover
- 11+ Partners: Inter-Hannover
A-rated markets and market appetite
While Minimum Terms & Conditions policies may all be fairly much the same, insurers are not, and nor are their approaches to the market. A key part of the advice that firms should be seeking from their broker is an informed review of the available markets, with a view to marketing the firm to those that best match the risk profile of the firm. Approaching insurers when a client firm is not within their target market simply delays the renewal process, and causes frustration for underwriters - unlikely to help clients' cause in the longer term!
Market and firm size
Many insurers have moved out of, or are less active in the 1-3 partner firm market. In fact, while sole practitioners tend to be lower risk, 2-4 partner firms produce more claims per partner, on average, than any other size of firm. That said, smaller law firms do not have to resort to un-rated carriers. Lockton have access to at least 5 insurers who will quote 1-3 partner firms (including the likes of First Title, Travelers, in addition to our two exclusive markets) , and 8+ in the 4-10 partner bracket.
For larger firms of 10+ partners, we can access every rated market - something no other broker can claim.
Market and work type
Insurers also select firms on the basis of work type. AIG issued clear guidance that they would not look at firms with more than 25% property/conveyancing exposure, for example. Similarly, certain insurers may rate litigation or commercial work, for example, more highly than others - meaning that they would not be the obvious first choice of insurer to approach for a PI firm, or a niche M&A practice.
Market and claims record
If your firm has experienced a particular swathe of claims, and it is looking increasingly difficult to place your PII at an affordable level, there are a couple of insurers that will be more prepared to consider 'distressed risks'. These insurers take a longer term approach, and will work closely with the client firm to improve their risk profile (Lockton can also provide a range of risk consultancy advice - and firms should ideally discuss concerns with their broker before PII renewal difficulties effectively force their hand).
Market Capacity & timing
We advise our insured practices to get their proposal forms in to us promptly. This is in part due to the fact that, as insurers receive proposal forms in, and commit to underwriting their preferred business, they may get close to or reach their target gross written premium. Get your forms in too late, and you may well find that some insurers will not quote - simply because they no longer have time to consider your application properly, or have reached capacity.
PII Survey 2013-14
The Law Society's latest PII survey has confirmed that gross fee income remains the 'dominant determinant of the level of PII premiums paid'. Unsurprisingly, economies of scale mean that for a firm with ten times the fee income of another, the average premium increase is only approximately three-fold (this also reflects the tendency for larger firms to produce fewer claims, proportionately, than smaller firms).
Again, comparing firms, those with residential conveyancing and/or commercial/corporate exposure typically face a significantly higher PII premium rate on fees (your premium expressed as a percentage of your gross fees). For firms already with some property exposure, if they increase their proportion of property work (i.e. their total fee income remaining constant) their premium will also reflect a (smaller) rise.
Average rates of fees
According to the survey - average rates on fees increased significantly last year, from 3.6% to 4.6%, with sole practitioners averaging 5.6%). The increase may be explained in part by the exit of Balva and Berliner from the market.
A note of caution: Average Rates on Fees figures need to be interpreted with some caution. Premium rates are calculated on the basis of several factors including: number of partners; gross fees; work splits; paid and reserved claims over a [10] year period.
How Lockton can help
Lockton produce benchmarking statistics every year to assist firms determine their firm's performance, and their PII rates. Your Lockton broker will be able to advise you if you have any concerns regarding your current premium rate.
We have close relationships with all the major markets, and regularly receive updates throughout the season on individual insurers market capacity and appetite.
We can assist you with making the best submission to secure the most favourable renewal terms. Producing a well presented proposal form, without gaps, is an important start. We have produced a range of guidance, and simplified our proposal form to make it easier for you.
For more information, or to discuss your renewal submission in more detail contact your Lockton broker, or our Solicitors switchboard on 0845 0501 471 .