More than half of solicitors expect their professional indemnity insurance premiums to rise this year, research has revealed.

The survey, carried out by insurer Zurich Professional at the beginning of the renewals season, found that 56% of the 202 solicitors questioned said their insurance premiums would rise. Just 14% maintained they would stay the same and only 3% thought they would fall.


On average, the respondents predicted an increase of 13%, but one in ten foresaw a rise of up to 20%.


Jeremy Alwyn, sales and operations director for Zurich Professional, said: 'While it is too early to say how the market as a whole is performing, we believe that it is still fundamentally under-priced.'


He explained: 'Not only does the profession have to purchase a higher minimum level of indemnity, it also faces the impact of claims arising from the demise of The Accident Group and increases in mortgage fraud.'


Mr Alwyn added: 'Firms are not simply looking for the cheapest quotation - they are placing greater importance on claims handling, risk management and the service they receive from their insurer.'


However, other professional indemnity brokers and insurers predicted that premium increases would not take place across the board.


Jonathan Davies, director and underwriting manager at St Paul Travelers Professional Risks, said: 'I don't think there will be sharp rate rises this year except for firms with claims issues. Firms that have shown improved claims histories and have taken risk management seriously over the last six years of the open market will continue to benefit.'


Nick Pointon, director at broker PYV, agreed but added that small firms could be hit hard by the increases in the minimum cover.


Steve Holland, director of Alexander Forbes Professions, commented: 'Increased competition in the insurance industry will mitigate against the increases that underwriters may want to see.'