5-Star Professional Indemnity Insurers

 

Currently, there is a significant loss environment in PII across the UK, with typical claims revolving around the pandemic and business interruption claims. The construction industry is also facing PII claims from fire safety, cladding and combustibility issues – lingering fallout from the 2017 Grenfell Tower fire in London. 

 

On top of that, the PII segment has been recently undergoing a correction – the unsustainably low rates of a previously soft market have been hardening as insurers reduce their risk appetite, line size deployment and capacity in the face of a daunting COVID-19-fuelled economic downturn. 

 

“Economic uncertainty, a prolonged lockdown environment and the fallout from the pandemic in general have led to the potential for increases in a range of losses across various insurance sectors, including financial lines,” says Jacqueline McNamee, the CEO of C-Quence, an insurtech MGA that offers management liability coverage, including D&O. 

 

Joanne Edgley, managing director of financial lines – professional indemnity at Nexus Underwriting, adds that losses in the sector stem from “systemic issues in areas such as financial services, knock-on effect on the construction industry post-Grenfell, claims arising from macroeconomic factors, recession and the global financial crisis.” 

 

“We continue to successfully monitor any COVID-19 exposure very carefully across all of our professional lines” 
-Joanne Edgley, Nexus Underwriting

 

 

The market today and tomorrow  

Both McNamee and Edgley are keeping a close eye on lingering damage from COVID. “We continue to successfully monitor any COVID-19 exposure very carefully across all of our professional lines,” Edgley says. 

 

She adds that Nexus strives to provide brokers with “continuity and longevity, service levels, strong relationships, the ability to underwrite ‘outside of the tick box’, [and] the ability to be creative and adaptive to underwriting risk, as well as fast and fair claims service.” 

 

McNamee notes that the pandemic high-lighted the industry’s outdated platforms and business practices, as brokers often lacked access to underwriters, delaying quotes and cover for clients. That allowed C-Quence to stand out by providing uninterrupted access to its cloud-based trading platform and underwriters. 

 

“C-Quence was, in fact, created to trans-form the broker experience through life-cycle process automation and by applying and integrating extensive third-party risk and client data and the application of sophisticated pricing [and] predictive, segmented portfolio tools and techniques using thou-sands of algorithms,” McNamee says. 

 

Ultimately, she adds, C-Quence’s technology is all about maintaining excellent service and quality levels for brokers. That includes individual risk-appropriate pricing, easy access to underwriting, and efficient consistency and sustainability. 

 

Edgley also sees continued hardening of rates and terms and conditions in the PII segment, which should increase insurers’ profitability. She believes underwriting expertise needs to improve and adapt to align with the new economic landscape of the post-COVID-19 era and that quality risk management should become an intrinsic part of any insured’s business. 

 

As for what separates the 5-Star Professional Indemnity Insurers from the rest, both women agree that one factor is paramount. 

 

“In a word – ‘service’,” McNamee says when asked what helped C-Quence win over brokers, “from the ease and speed of generating a quote, including super-fast referral decision-making, to access to an experienced underwriter team to the immediate delivery of concise and comprehensible policy documentation.” 

 

Meanwhile, Edgley believes Nexus Underwriting gained brokers’ votes “because of our service levels, a flexible approach to risk selection and our dedication to provide solutions to insureds’ insurance placement.” 

 

“Predicting the future is never easy. We have learned to expect the unexpected”
-Jacqueline McNamee, C-Quence 

 

 

What are brokers looking for?  

As part of the survey to determine the 2021 5-Star Professional Indemnity Insurers, IBUK asked brokers what’s most important to them when selecting a professional indemnity insurer. Three criteria dominated brokers’ priority list, each deemed important by 88% of respondents: claims payment and processing, underwriting expertise, and service to the broker. 

 

“Good service” was mentioned frequently when brokers were asked why they would recommend their insurer or MGA partner to another broker. “General service levels are important – when requesting quotes, when sending in renewals, just the general service level,” one broker noted. 

 

Another critical factor for brokers (ranked as important by 75% of respondents) is an insurer or MGA’s ability to create a bespoke policy for their PII clients. One broker praised their MGA’s “willingness to find a practical solution for clients”. 

 

Getting good value for money was also fairly important to brokers – 63% rated it as an important factor when choosing a professional indemnity insurer. Several brokers mentioned competitive pricing when asked why they would recommend their favourite insurer or MGA. 

 

Less important to brokers in the PII segment was an insurer’s access to risk mitigation partners (deemed important by only 38% of brokers) and online platform (which only 13% of brokers would consider when selecting a professional indemnity insurer). 

 

IBUK also asked brokers what qualities would draw them to an MGA in the PII space. A healthy proportion of brokers (90%) said MGAs’ expertise in niche markets is key. “The market is moving more towards MGAs, giving us access to niche markets – it’s a higher-value proposition for brokers,” one survey respondent said. Another said they choose MGAs for their professional indemnity clients because “it’s their specialism. I don’t need them to be the same as a main general market. I want people who are real specialists.” 

 

Brokers also enjoyed MGAs’ access to a wider variety of markets and carriers; 87% rated this as an important factor when using an MGA. “It’s important for an MGA to be able to offer an alternative option to the standard in the market,” said one respondent. However, a couple cautioned that capacity is sometimes a challenge with MGAs. “Capacity is important to us,” one broker said. “It’s useful to have an MGA, but we need to be confident in their capacity.” 

 

Another factor that came up again and again when brokers were asked why they choose to work with MGAs was their agility compared to larger insurers, which enables them to be more responsive and innovative. 

 

“[MGAs] tend to be small, and I think the big brokers/insurers struggle to innovate. A good MGA is like what biotechs are to pharmaceutical companies,” one broker said. Another noted that “during lockdown, MGAs have outperformed the market for service and support. The big players have struggled to get a handle of staff, but MGAs are smaller in staff and more controlled, and staff tend to be more experienced and self-sufficient.” 

5-Star Professional Indemnity Insurers

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