Relationships with insurers and the stability of providers are now more important factors than cost when law firms come to choose indemnity cover.
The Law Society’s poll of almost 500 firms with up to 25 partners found 27% placed the existing relationship with insurers as the most important factor in choosing a professional indemnity insurer.
The rating of the insurer was also a higher priority than cost, with 25% seeking out a rated insurer as opposed to 21% who favoured a cheaper option.
The importance of cost during the benign 2014/15 renewal period fell dramatically, having been the most important factor for 59% of firms in 2013/14.
Changing priorities were reflected in unrated insurers losing market share in 2014/15, from 23% to 17%.
The issue of unrated insurance providers came to a head in recent years with the high-profile collapse of some firms and the suggestion of unrated firms being banned from the market – an idea that was later scrapped.
The poll also reveals significant changes in the way firms choose to renew their PII cover.
Almost one-fifth (18%) now take out policies for periods of longer than 12 months, compared with just 9% in 2013/14. Half of firms took out policies in months other than September.
The ease of renewing remained broadly the same as in the previous two years. Around three-fifths (62%) of firms felt the 2014/15 renewal period was not difficult, with 21% reporting it was ‘very difficult’ or ‘quite difficult’.
The most common reason, given by two-thirds of respondents, for difficulty was that renewing was time consuming, with 24% finding the process stressful or tedious and 14% complaining of delays.
With the closure of the Assigned Risks Pool in 2013, 287 firms entered the three-month extended insurance policy in 2014, according to the SRA’s statistics. In 2015, the number was down to 39. The SRA reported that only two firms did not appear to have renewed their policy after 90 days.
Law Society president Andrew Caplen said: ‘I am pleased that the survey found high levels of satisfaction with the help and support the Society offers the profession through its PII website guidance, Professional Update news and reminders and the Practice Advice Service.
‘Many firms continue to find the renewal process difficult and time consuming. The Society is considering what steps might be taken to try to reduce the administrative burden on firms renewing their PII policy.’