Indemnity: premiums fall despite level of cover doubling

The solicitors' profession spent £7 million less than last year on insurance premiums, figures revealed this week.


A competitive market meant the overall cost of premium for the profession fell to £234 million - despite a doubling of the minimum sum insured and changes to the aggregation clause introduced this year (see [2005] Gazette, 27 January, 1).


Premiums in the final year of Solicitors Indemnity Fund (SIF) in 1999/2000 totalled some £255 million - though these were inflated by fears over the millennium bug and a surge in notifications before the move to the open market. Premiums came to £235 million in SIF's penultimate year - slightly higher than last year's figure, but at a time when gross fees were lower.


Peter Farthing, chairman of the Law Society's professional indemnity committee, said: 'This year the market is providing cover of £2 million per claim instead of £1 million per claim - that's double the level of indemnity, at a cost that is a great deal less than it had been under SIF. The very competitive market is working well for solicitors.'


Zurich Professional held its position as the leading insurer of the profession, with 22.6% of the market (down from 24.2% last year) and insuring 30% of all firms. QBE International leapfrogged St Paul Travelers for second place with a 15.7% share (up from 14.7%).


St Paul fell to a 14.5% market share from 16.2%. AIG Europe took fourth place with 8.8%, followed by Norwich Union (8.2%), Royal & Sun Alliance (6.6%) and WR Berkley Insurance Europe (5.3%). Hiscox fell from 6.6% to 1.1%.