Solicitors look set to reap the benefits of a highly competitive professional indemnity insurance market this year, as insurers are likely to offer the same rates as last year despite increases in fee income, brokers have predicted.



Steve Holland, divisional director at broker Alexander Forbes Professions, said there is still a huge 'hunger for business' among insurers.



He said: 'Rates have been going down for the past three years. There is a lot of competition between the major insurance players and new entrants to the market. If one or two try to increase rates, others will replace them. Firms will be getting insurance at the same price, even though gross fees have gone up.'



Sandra Neilson, European practice leader for law firms at broker Marsh, added: 'We are not seeing rates going up - it is still a very competitive market. There are more insurers wanting the business than not, and that drives prices down. Brokers are encouraging insurers to leave prices as they are, although there is revenue growth.'



Jonathan Davies, director and underwriting manager at insurer St Paul Travelers Professional Risks, said: 'I would not have thought there will be much difference to the rates this year compared to last year. The cost of reinsurance has gone up, but this year's market will mean insurers will probably have to bear the cost of this themselves rather than passing it on to clients. They may have to pass this cost on next year, however.'



He added: 'I doubt whether insurers will offer any rate reduction, but they may offer the same rate for higher gross fees, which will equate to a reduction.'



Nick Pointon, director of broker PYV, added that while there was a perception that rates would be low, sole practitioners may see increases as some insurers are raising their minimum terms.



Rachel Rothwell