Professional risks have been keeping the regulator busy this
month while broader trends create challenges and opportunities for
insurers. Elsewhere, Q1 results made interesting reading. PremExtra
considers the salient points.
The high cost of solicitors' professional indemnity insurance continues to fuel debate, with the Solicitors Regulation Authority (SRA) taking centre stage.
The majority of responses to an SRA's consultation on unrated indemnity insurers want them barred, according to a report in Legal Futures.
However, the regulator is holding out against a ban, even though 18 of 31 responses said they were in favour. This follows news that another unrated insurer - Iceland-based ERIC - was heading for liquidation.
In another headline-grabbing move, the SRA has called for the minimum level of indemnity cover to be cut to £500,000 - down from £2m for traditional partnerships, or £3m for incorporated practices.
The SRA is also driving what the Law Society Gazette describes as; 'a radical shake-up of the solicitors' insurance rules'. This involves a proposal from the SRA that businesses with turnover above £2m should not be able to rely on compulsory indemnity insurance to sue solicitors for negligence.
In a busy period of the SRA, it is investigating 23 law firms for non-disclosure to insurers after last year's PI insurance renewal, while a further 58 firms have come under the legal watchdog's radar for non-compliance issues.
Motor insurance trends
Various claims trends have generated widespread discussion in
the media this month - not least the topic of telematics; devices
fitted to cars that collect data on driving behaviour.
Fitch Ratings believes the UK motor insurance industry will benefit from telematics because they can address longstanding issues such as rising claims costs and fraud. Fitch said telematics could help insurers to deliver better risk prices, leading to more informed underwriting and improved customer retention.
Meanwhile, the Motor Insurers' Bureau will carry out extensive actuarial research after figures showed mortality rates on long-term catastrophic injury payments were higher than expected. Paul Ryman-Tubb, head of technical at the MIB, told Post Magazine: "It will be of benefit to insurers and others to learn from the data we have."
Meanwhile, PremExtra wonders if the fact that 64% of household and travel claimants are satisfied with their service according to the Financial Conduct Authority (FCA) should be considered good news. The FCA said it had "uncovered no evidence of systematic attempts by firms to deny valid claims, squeeze settlement costs or deliberately slow claims".
And finally, the big players completed their rounds of Q1 results with the likes of Aviva's UK general insurance division writing £845m of net premiums in the first quarter of 2014, down 8.4% on the £923m last year. However, Aviva chief executive Mark Wilson told Insurance Times that the same level of premium volume reduction would not continue through the year.
Car insurer Admiral has also suffered financially after turnover fell seven per cent in the first quarter, but chief executive Henry Engelhardt stayed upbeat. He told Insurance Age: "Little has changed since the full year results, and our expectations for 2014 remain positive and unchanged."
Allianz UK reported a narrow pre-tax profit of £24.7m, down 47% from £46.8m in 2013 after being hit by weather losses. On a more positive note, Allianz UK chief executive Jon Dye said the insurer had added around 250,000 customers since the same period last year.
Dye told the Post Magazine: "As expected, the cost of the UK's wettest winter on record has had a negative influence on our profit performance compared to Q1 2013, which was a benign quarter for weather and large claims."