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25 July 2022

London Market Professional Indemnity Report July 2022

25 July 2022 Insurance & Reinsurance UK & Europe

London PI market buoyant, but wary of economic headwinds

The report reveals widespread optimism about market conditions for the coming months, tempered by wariness of macroeconomic and inflationary pressures on the horizon. While 88% of respondents said they believe rates will continue to increase in the next 12 months, a significant majority (61%) said that broad economic trends would affect the volume of PI business underwritten in the London Market.

Download the full report here

  • Market dynamics: 81% of respondents expect more new entrants, exits and consolidation in the marketplace in the coming months
  • Claims: 80% expect the frequency of claims to increase in the next 24 months, while 68% expect the severity of claims to increase in the coming two years
  • Pricing: 88% of respondents say rates will increase in the next 12 months
  • Appetite: 53% of insurers say their appetite for writing PI coverage will increase
  • COVID-19: 64% say post-COVID working practices will create challenges in building and maintaining networks

Simon Konsta, Partner, Clyde & Co, comments:

“These findings show a great degree of optimism in the London PI market despite increasing economic headwinds. While respondents overwhelmingly believe the frequency of claims will increase over the next two years, there’s confidence that the market has sufficient capacity and is at a satisfactory level in terms of rates to weather any coming storms and remain both a competitive and respected hub for PI risks. Respondents, as well as buyers of PI coverage, will have an eye on inflation levels as we move past the most recent renewals.”

About the report

Produced

25 July 2022

Written by:

Rob Crossingham

Rob Crossingham

Partner

Simon Konsta

Simon Konsta

Partner

Read time

10 mins

About the report

Produced

25 July 2022

Written by:

Rob Crossingham

Rob Crossingham

Partner

Simon Konsta

Simon Konsta

Partner

Read time

10

About the report

The Clyde & Co Global Professional Liability team conducted an online survey of 89 targeted London market insurance practitioners during May 2022 to find out what would help the industry plan to overcome the hurdles ahead in terms of wordings, cover, regulatory intervention, and the likely impact on deals in this space. The findings were analysed in interviews with a select group of underwriters, brokers and claims professionals, as well as Clyde & Co partners, to gather their insights on developments in the PI market and to gauge their challenges and concerns.

End