London Market Professional Indemnity Report July 2022

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.

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• 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

Rob Crossingham , 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.”