Solicitors in the UK appear to be going through a similar insurance crisis to that which hit their Irish colleagues last year. The Lawyer reports that this year’s renewal process, now in its final stages, will be “tougher than ever.” Ironically, it seems part of the difficulty has stemmed from the Irish Financial Regulator’s administration of Quinn Insurance, which had been aggressive in its attempts to into capture some of the UK market.
Meanwhile, the SMDF recently reported a deficit of €15.9 million for 2009. Last year, the Law Society told solicitors that the SMDF insured over 60% of the market. Accordingly, emergency measures were taken to support the SMDF and to avoid the bulk of the profession facing a lack of cover.
Today, the Law Society informed solicitors that XL, a new entrant to the insurance market in 2009, captured 28% of the market for 2010 (1% more than the SMDF). Therefore, it would seem that the SMDF has lost over half of its customer base in one year, most of them being lost to XL.
It had been hoped that the changes made to the PI insurance system last year would lead to greater stability this year, but it remains to be seen what effect the dramatic loss in customers will have on the SMDF.
3 thoughts on “Another storm brewing for the legal profession?”
Rossa: It gets a whole lot worse. UK Law firms specialising in the area of PI – Personal Injuries (as opposed to Professional Indemnity) are no longer being afforded the wide latitude by banks and credit institutions to settle and clear cases in the PI space.
This is a phenomenon which is yet to hit these shores. The Quinn Administration caused some jitters in the UK PI market. I forecast that it is only a matter of time before we see some PI/Insurance linked firms come under pressure.
Anyway, perhaps I should avoid putting out gloomy comments.
Interesting development, although the advent of the Injuries Board in Ireland has led to a huge amount of PI cases being handled in house in Ireland (unless proceeding to full trial).
In my experience, UK insurers have an extremely low opinion of the Irish court system (the mechanics of same, rather than the judiciary) which leads them to favour settlement when possible. They have greater opportunity in the UK & US to put pressure on what they perceive to be nuisance cases and to have them dismissed. Here, such a case can trundle on for years.
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