conference focused on the professional indemnity insurance (PI) market and the
challenging rate rises and cover reductions have created for customers and
The Angle needed
to address the unsettled backdrop that the insurance industry is facing in
order to restore these three key pillars: Trust which has been tarnished by
cost rises, market exits and unsustainability, security whereby businesses should
feel they can prevent a claim before it even happens, and understanding as it
becomes clearer that SMEs clients don’t understand why the PI market is going
through such a difficult period.
two distinct sections and facilitated by Times Technology Business Editor,
Katie Prescott, the busy conference room heard about the challenges from a
customer perspective and then from an industry viewpoint. By hearing from these
two points of view, brokers could come away armed with a new perspective on how
to tackle previously difficult conversations with customers.
off proceedings by recounting the story of a hairdresser during the pandemic
who received no payment and no communication when the pandemic hit – an
anecdote that appropriately captured why faith in the industry is at an
A challenging environment for SMEs
panel consisted of Derek Cribb, CEO of IPSE, James Trezona, MD of the Rooster
Point creative agency, and Beverley Bates, advice services director at Markel
Trezona talked about his business and how market volatility and uncertainty are
two key challenges they face.
James has seen a slight slowdown in invoice settlement and more scrutiny on
whether projects have delivered on their promises. Against this backdrop of
increasing financial uncertainty, the last thing his company needed was
expensive insurance, especially where the reasons for cost rises and cover
reductions are not well explained or understood. James cited his broker’s poor
‘because lots of people have pulled out of the market’ explanation, saying that
he would have been more comfortable being told that prices had been
historically too low in the past – a point linking back to the need for greater
customer education and understanding.
backed up many of James’ comments. Uncertainty remains a real challenge for IPSE’s
members and the support his organisation provides is now as much around staff
wellbeing as it financial and operational issues.
of the IPSE website had shown that late payment template letters have started
to be downloaded in greater numbers. This suggests the potential for real
hardships to come which is something that is a real concern for the
organisation and their members.
subject of PI insurance, Derek had strong opinions that insurance should give
you a feeling of security and not the feeling that it could let you down at a
crucial moment – something that had occurred during the pandemic. Closing the
‘understanding gap’ between insurer and customer was important, which is why
the role of a broker and the types of questions they ask is so important.
Bates was able to provide an insightful picture from her first-hand knowledge
of what advice people are seeking from Markel’s legal helpline.
confirmed that the helpline is receiving more calls around finance, debt and
employment queries. SMEs are worrying about their staff and how they can be
more flexible to accommodate changing work patterns and retain their workers.
specifically, people seem to be more concerned about debt with questions such
as ‘How long should we wait until we issue proceedings?’, ‘How do we challenge
payment for a service that hasn’t delivered as expected?’ and ‘How do we
extract ourselves from expensive utility contracts?’ becoming more common – all
questions that point to a widespread lack of security across the board.
closed with a series of audience questions exploring the issues raised in more
depth. Many brokers in the audience agreed that what they had heard was a fair
reflection of the conversations they were having with customers and that it was
useful to have the points reinforced from different perspectives in order to
gain a new understanding of how to speak to their customers moving forward.
The industry has to wake up to
Part II of
the day focused on the industry perspective with Ross Dingwall (Partners&
Managing Partner, Scotland & North England), Richard Brooks (Broker
Development Director) and Katie Scott (Editor at Insurance Times) on the panel.
pointed to some of the areas most challenged by the current difficulties in the
PI market, including construction and accountants, with 100% increases in rates
not uncommon. Added to the difficulties – both for customers and the market -
is the fact that claims frequencies are likely to increase if we enter a
continued by saying that capacity was less of an issue with some having
returned to the market as rising rates had created a more profitable
environment, but that the underwriting cycle didn’t help anyone, not least end
customers, most of whom don’t understand what an underwriting cycle is, let
alone why it should affect them.
continued the discussion by addressing the question: “How do you square trust
with rising prices?”. Ross is a passionate believer that the insurance sector
is a force for good, but it has lost its way to a degree. The sector has to
take a hard look at itself and crucial to servicing customers is having clear
conversations about the insurance options available, the features and benefits
and what is/isn’t covered.
maintained that Partner& is still seeing prices going up and cover reducing
but this trend has started to plateau in recent months due to capacity coming
into the market. However, the traditional cycle isn’t helping anyone and it’s
only by working together that we can hope to reduce its impact.
pointed out that Markel has remained relatively consistent in this market, in
terms of both cover and price. And while challenges remain, this stance is a
strategically important one for the company. With Markel’s added-value legal
and tax business services, including a legal helpline and contract review
service, SMEs have the tools available to reduce their risk and present a
stronger picture for underwriters at renewal. Markel therefore seeks to repair
industry trust, security and understanding with it’s PI proposition.
Richard’s comments saying that brokers had a big part to play in helping
clients present their risk in the best possible way in a bid to secure
reasonable renewals terms.
service levels were also high on the agenda with Ross Dingwall saying that this
service was becoming a major issue. Such was the problem that some of his
company’s staff had left for a different industry because they were so
frustrated having to deal with insurers. In Ross’ view, consistency, clarity
and accessibility were all poor.
pointed out that the move to home working has made it more difficult to get
through to insurers, according to a number of brokers she had spoken to.
Prescott asked whether a new industry body should be established to monitor
insurer service, however, all panel members were against this idea. Richard
pointed out that most insurers have their own NPS surveys and there are a
number of external studies that monitor service, not least the Insurance Times Five Star Survey.
panel members were asked to crystal-ball gaze and predict where the PI market
might be in the coming months.
Ross was of
the view that some sectors will still be challenging but the biggest spikes
should have come and gone. Richard said that if everyone works together, a more
consistent market is possible. And Katie thought that inflation would maintain
the upward pressure on premiums but the brokers she has spoken to are all hoping
for a more stable PI market.
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