Professional Indemnity Insurance Market Trends and Analysis for Q3 2018
The Professional Indemnity (PI) insurance market is showing early signs of hardening. The latest Australian Prudential Regulation Authority (APRA) statistics show a deterioration in claims development.
The heightened directors and officers securities class action environment in Australia has drawn focus from insurers’ global head offices. As a result, PI is either under scrutiny, or seen as a class to grow and utilise to diversify insurer financial lines portfolios. This combined with the deteriorating PI loss ratios, trusted and well-established PI insurers are pushing rate; and new inexperienced underwriters, often with a lack of product, are trying to buy market share.
- The PI insurance market is showing early signs of hardening – high loss ratios are materialising; and the increase in D&O securities class actions is having a flow on effect
- PI exclusions are being introduced to insureds with cladding material exposures; and any organisation involved in the banking and financial services royal commission
- Increased regulatory investigations are stress testing the breadth of investigation and loss mitigation cover available under PI policies
- Cyber insurance – with the introduction of new data privacy legislation, it’s important to understand how your PI policy will respond; and what gaps can be covered by a standalone cyber policy
- Rate increases are expected to continue. Despite several PI insurers withdrawing from writing PI insurance, there continues to be available capacity in the London market
- Finally, we provide some tips for success when procuring PI insurance
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