This article was produced in partnership with Travelers Europe.
Mia Wallace, of Insurance Business, sat down with James Graham, director of professional indemnity of Travelers Europe, to discuss what’s happening in the PI insurance market.
Receiving the right answers is all about asking the right questions, and for James Graham (pictured), helping clients and brokers alike ask the right questions about their professional indemnity (PI) insurance needs is an integral part of his role as director of PI for Travelers Europe.
Discover more about how Travelers Europe supports the PI insurance market here
In a recent discussion with Insurance Business, Graham spoke about the current state of the PI market and how brokers can help their legal clients obtain the right coverage. It’s a market that has been in a period of correction for the last four years, and it was only towards the backend of 2021 that Travelers Europe started to see signs of stabilisation in claims activity.
“That’s not to say the loss frequency or severity has gone away, because it certainly hasn’t,” he said. “It’s just that we didn’t see a continuing worsening of loss experience across our portfolio. Premiums were finally starting to tackle some of the losses from prior years, and they started to offset some of the suppression that we experienced from two decades of softening rates.”
The last four years have seen considerable uncertainty sweep the market in many forms, and now that inflation is hitting a 40-year peak the potential for a recession looms on the horizon. “The market is not out of the woods,” Graham said, “and there is still some way to go before the PI environment can be considered stable.”
With PI remaining a volatile landscape, clients operating in the legal sector are facing a melting pot of challenges converging at the same time. Among the top concerns facing clients are inflation and its resultant mounting financial pressures; continuing concerns about staff wellbeing in the aftermath of COVID-19; and questions around client selection and sanctions amid heightened geopolitical tensions.
“Understanding what insurers want to know is the key to creating a healthy, collaborative dialogue around sourcing the right PI coverage,” Graham said. Taking the ongoing situation in Ukraine as an example, insurers need to understand any exposures that existing or prospective clients might have to the conflict, and to make sure that the client’s due diligence is robust enough to identify any individuals or companies that may be on sanction lists.
What clients need from their insurance partners is comprehensive, clear-cut guidance and support around the practicalities of finding the right coverage. Graham shared some of his top tips on how clients can take the first steps to doing so.
“A key element is to take care of your proposal form and ensure it is legible,” he said. “If you are a broker, please try and help your clients make their submissions stand out and demonstrate the firm’s approach to risk. It’s important that the submission is provided in good time, ideally two months in advance of renewal.”
“Ensure that any additional information that is provided is supplied in a clear and concise format. It’s important to try and tie back a firm’s approach to risk to some of the hot topics around inflation, well-being, sanctions or even new cyber risks. The mistakes I’ve seen are really simple administrative mistakes, for example, not fully completing a proposal form or not providing additional information where it is requested.”
When proposal forms are provided at the last minute, it puts clients at a disadvantage because it reduces the time available to fully review those forms and understand the risks and exposures that are applicable. “As a broker,” Graham said, “the best thing you can do to mitigate these issues is to proofread clients’ proposals and give them examples of what a well-put-together submission looks like.”
“Also, most brokers are fully aware of our appetite,” he said. “So, it’s about making sure the submissions that are provided fit with our appetite and that those that may be borderline have the additional information required to help us understand their business better. The other key information to provide is up-to-date financials and claims information, plus anything else they feel could get their approach to risk and the type of firm they are across to us better.”
Travelers Europe is proud to offer a broad range of services and support to its PI clients, Graham noted, and looks to utilise an experienced and responsive underwriting team to support brokers in any way possible, whether that’s by meeting clients or by using their in-house claims team, who are all legally trained. Travelers also hosts an in-house risk management team to support clients with risk-related issues as well as their own law firm, Travelers Legal, to help insureds defend claims.
“Most recently, we have launched a post claims wellbeing service,” he said. “It is there to support individuals who are involved in a claim, and may find the additional stress has an impact on their mental wellbeing. So, that’s an added value service that ultimately aims to ensure we support those that need it and help them get back on track as soon as possible.”
Exploring the why behind Travelers’ holistic approach to supporting legal clients, Graham highlighted the benefit such services bring to brokers and clients alike, and advised on the need for insurers to develop a full range of client-orientated support services if they are looking to maintain a market-leading position.
Discover more about how Travelers Europe supports the PI insurance market here.
James Graham is director of professional indemnity for Travelers Europe. He first joined the insurer in November 2021 after a seven-year stint with Marsh. Travelers Europe was recognized as one the Best Cyber Insurance Companies in the UK. Read the full list of winners in 5-Star Cyber special report.
