Law Management Blog

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Move to scrap the assigned risk pool

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The scrapping of the assigned risk pool does nothing for the debate on the Professional Indemnity Market. The fact is that the whole process is flawed.

Whilst the articles in The Gazette raise some interesting points, even some crucial ones if you believe in the need for diversity of firms in the legal market. They don’t seem to address the fact that the problems in the market are much of the professions own making. Why have we:

  • A single expiry date. This means that the market is inundated with proposals at one point in the year and the insurers are able to assess the market in one easy comparison making the market into ‘one book’ at one glance.
  • A complete lack of understanding amongst the majority of solicitors that you need to sell yourselves to the underwriters. The insurance market needs to know of your commitment to risk management, training and the way in which you conduct your business. If not I think they are entitled to believe that your firm is just one of many.
  • Not realised that the brokerage system does not work for solicitors. There are only really a handful of good brokers in the market who have direct access. Yet solicitors continue to deal with their local broker who then has to refer it onto a market broker who then presents ‘blocks of risk’ to an underwriter. The firm then gets no personal representation and the underwriter has no choice but to write his business on a category of risk.
  • Really why has the profession not realised that all of this talk of risk management which has been so prevalent over the last ten years will be ignored at a cost. The cost being increased premiums. I go to risk management conferences, have spoken at them, and every year someone stands up and says “Engagement letters are important” well if the profession has not got that message yet maybe it deserves the market that it has.

Yes the market does need looking at and I believe the assigned risk pool should be abolished but there are fundamental restructuring issues we need to deal with before we do it. If we’re going to have a free market let’s do it, but let’s make it a fair one.

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Written by Andrew Hodges

December 2, 2009 at 5:37 pm

Posted in Comment, LinkedIn

Tagged with , , ,

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