10 more weeks – waiting for PII renewal
Posted by Marc Rowson, Senior Vice President at Legal futures Partner Lockton
As of this writing, we are just over 10 weeks away from the Professional Liability Insurance (PII) renewal date of October 1, the most populous renewal date (to call it popular would be dishonest! ) for law firms.
The process has never been a particularly pleasant time for the vast majority of businesses, and neither has it been in the previous two years, with volatile market conditions and the backdrop of a pandemic creating both worry and anxiety. for many.
As we head into the next renewal, the waters seem much calmer, and for some (not all), there could be a return to competition between insurers to secure their customer base. We expect rates to rise, but at a fraction of what has been seen recently. Insurers all seem to be looking for a renewal season that is as smooth and stable as possible.
Insurers and those responsible for managing their organizations’ attorney portfolios continue to navigate a volatile and increasingly litigious environment.
There remain a number of significant losses in process over the historical underwriting years and insurers are keen to point out that year-over-year reporting trends are increasing, although a significant crystallization of these claims will not occur. not produce yet.
This, coupled with geopolitical tensions and an uncertain national economic outlook, are the most concerning factors impacting underwriting strategy ahead of October, serving almost as the proverbial handbrake on welcome rate cuts and new entrants disrupting the market. current status quo.
While I recognize that the insurance renewal process can be incredibly tedious and time-consuming, improving market conditions make it more important than ever to ensure that a complete and detailed presentation is provided to insurers and in a timely manner. .
Here are some suggestions to facilitate renewal negotiations:
- Ensure that the proposal form is fully completed and detailed responses are provided as additional information if required;
- Provide up-to-date complaint summaries – If there are significant complaints, include an appendix to the presentation with a narrative on the subject, the current position and any actions taken to prevent their recurrence (at the level of the department or company-wide). If you have not already done so, request them now to ensure there will be no delays once the proposal form is completed;
- Include a cover note on company letterhead to support the proposal form, covering at a minimum the following:
- The company’s business performance and points to note since the last renewal;
- The outlook for next year and any strategic goals the company is seeking to achieve;
- A brief customer reference – has it stayed the same or has it changed? ;
- Any investments made in the last 12 months that improve risk controls (e.g. recruitment of staff, IT investment, expenditure for external experts/training); and
- The company’s attitude towards IT security and an overview of how you manage ‘IT system risk’.
- Ensure that the renewal presentation is made with the chosen representative(s) by the beginning of August; and
- As market conditions may improve, check to see if your current broker is in a position to undertake an extensive direct marketing exercise on your behalf. If they can’t, be sure to act quickly and supplement or replace with the services of a reputable alternative.
We wish all companies renewing in the coming months a positive and successful renewal, and we hope you find the advice above helpful.