Reading about Zurich Professional's predicted professional indemnity premium rise of 15% this year, and PYV's research showing solicitors are expecting their premiums to rise even higher - by up to 20% (see [2004] Gazette, 2 September, 1), it concerns me that your readers will be misled into believing that premium rises are inevitable and unavoidable.


Those 'new underwriters' that Nick Pointon of PYV refers to are in fact established underwriters and enormously experienced in providing solicitors' PI. While established, they are bringing new insurance capacity to the market, and it is that which allows them to offer the 20% or more savings on last year's premiums for certain sectors. Unencumbered by the 'long tail' losses suffered by traditional players, these underwriters do not need to keep premiums high to pay for previous claims - or to make up for offering unsustainable rates when the market opened up in 2000.


This brings me to question the research by Zurich Professional as, contrary to our prediction that new entrants would be saving 20% on last year's premiums for the four-to-ten partner firms, our experience has been to offer a minimum 20% reduction, and in some cases 50%. While it appears that the large players, as we predicted, have indeed increased premiums significantly to make up for losses on earlier years, this will by no means be the norm, especially from the new players.


We have proved that there is room to be more professional and quote a correct and sustainable price based on the merits of the risk, and we will not be expecting to hike premiums. Far from treating over-inflated PI premiums as unavoidable and inevitable as this research would suggest, it is clear that if practices are not looking to obtain alternative quotes they will lose out.



Kevin Culliney, executive director, Howden Insurance Brokers, London