Back in the days of the old school yard (as the Cat Stevens song goes), when we’d use jumpers for goal posts and kick around a tennis ball, there was always that stage in the pre-game ritual when 2 captains would pick their players. No one wanted to be left until last, no one wanted to be the sympathy choice.
We are starting to see something like this analogy in the Personal Injury After the Event (ATE) insurance market. Pressures on insurance capacity have led to some ATE providers having a selective appetite for writing what I call ‘non- standard’ lines of Personal Injury work.
Selection against has often been, and is still a concern, for the ATE insurance market. This has been intensified since the 2013 LASPO reforms as law firms have tried to understand where the risk actually is in a PI case. Many law firms are now carrying risk on their balance sheet which has undoubtedly created a whole raft of pressure on cash flow, opening up the flood gates for allegations of under settling claims -where a whole new industry is now emerging.
While law firms should be appropriately protected by their Professional Indemnity Insurance (PII), if the claims for under settling increase then firms will begin to find even greater challenges when getting PII in the future. This is one of the reasons why Allianz Legal Protection has developed a ‘Part 36 only policy’ to enable firms to adequately protect their clients and themselves against such claims.
The selection issue however, is not restricted to law firms, ATE insurers themselves appear to be selecting which case types they will and won’t insure. This is often due to the limited capacity being provided by their underwriters because of a lack of data or experience. This means that only transactional, volume based PI case types, such as RTA, Employers, Occupiers and Public liability ATE cover is being made available.
For more specialist case types, such as Product Liability or Abuse and Occupational Disease, the availability of suitably priced cover appears to be limited.
At Allianz Legal Protection, as the underwriter of our own products we don’t have such capacity issues due to our strong capital base. With longevity in the legal expenses market, we have the expertise and data to support our decision making and as such are able to consider a firm’s entire personal injury portfolio, taking on the more transactional work alongside specialist, non-standard case types. We also have a flexible approach to cover, which enables the law firm to decide with their customer on the most appropriate level of cover depending on the case type and financial risk exposure. This ensures that no matter how small the relevant risk is, the client is appropriately covered through a fair and proportionate premium structure.
Business Development Manager