Legal indemnity market dwindles as AXA pulls out

Another indemnity insurer has decided to pull out of the legal market, further reducing the number of players, which dropped from 35 to 26 last year.AXA was the tenth biggest insurer in the market with 3.17 million of cover, 2% of the market.

It covered some big players including City giant Clifford Chance.A spokesman said: 'It's a line of business we no longer wish to continue in the UK.' He added that existing policies would be honoured until their renewal dates, when AXA-insured firms would be asked to go elsewhere for cover.The development comes less than a month after Cox - the ninth biggest player in the market with 6.6 million of cover - also withdrew.Andrew Darby, the Law Society's head of professional indemnity, said the market should easily be able to absorb AXA's cover.Michael Rendell, a spokesman for broker PYV, said: 'The market is tightening, and there are now fewer players, but as premium prices rise this year there may well be new entrants into the market.'Chris Perrin, deputy chief operating officer at Clifford Chance, said: 'We're obviously conscious that it's a hardening market following 11 September, but the fact that one of our insurers is moving out of the market is not the end of the world.'Jeremy Fleming