Brokers are a driving force behind the largest rise in written risks for professional indemnity (PI) in more than ten years, according to an underwriting expert.
New figures from the National Claims and Policies Database shows a 12% annual rise in the number of PI risks written across the country last year, as well as a sharp drop in the average written premium.
More than 600,000 PI risks were written last year, up almost 300% in just a decade.
Solution Underwriting Managing Director Rhys Mills attributes the skyrocketing rise in written risks to the education of brokers and contractual requirements.
“We’re seeing the growth in the professional indemnity market being largely driven by legislation changes and contractual requirements,” Mills says.
“The latter are being driven by the majority of contracts these days including a requirement for professional indemnity to be held by suppliers, even when there isn’t an insurable PI risk.
“There’s a much greater awareness of the need for this type of cover, if not for who actually needs it, for what and when. We are finding that we’re guiding and educating brokers more and more in this respect.”
The average PI premium fell by 16% to $2192, which Mills says is the result of healthy market competition.
“This would be a combined result of increased competition and the growing number of occupations that historically haven’t purchased PI but are doing so now. These are occupations such as training consultants, IT consultants, bookkeepers and the like,” he says.
The report also showed a slight decrease in the number public liability risks written in the underwriting year and average premiums reaching their lowest level in a decade.
To download the full report, click here.