The 1st April continues to be a popular choice of renewal date for both law firms and Insurers, April remains the second most common date for a law firm to renew their professional indemnity insurance (PII). Though not as congested as October, the April renewal season provides a clear indicator of what to expect for those firms renewing later in the year.
With just over six weeks to go, if renewal presentations are not yet complete, I would strongly urge that these are concluded as quickly as possible to ensure you leave plenty of time to explore the marketplace.
2022 saw the ?beginning of the end? of significant rate increases from insurers, and as the year progressed, despite rate increases still being felt, the trajectory of these increases were reducing. The hope and expectations are that this will continue in to 2023, and the renewal process will be less daunting and challenging than it has been in recent years.
At the time of writing, the majority of insurers are now open and actively considering enquiries, and momentum will continue to build in the run-up to 1st April, our advice would be to engage with your representatives as quickly as possible whilst underwriting resource remains at an available capacity.
Whilst speed of delivering the presentation is important, it?s crucial that your presentation is detailed and shows your practice in the most effective manner. In addition to the proposal form we would urge you to provide a narrative on how the business has fared since the last renewal, touching on the highlights, the opportunities you are seeking to take advantage of and how you intend on dealing with any potential challenges.
In addition, if you have had claims/notifications, be transparent ? don't wait for insurers to ask. It is important to highlight what occurred, how the issues have been addressed, and why there are no systemic issues. Insurers are not always deterred by a particular claim, what acts as a barrier to them is the uncertainty that more claims could follow.
For those firms renewing in the coming weeks, we offer the following thoughts
- Timeline management: robust management of the renewal timeline will ensure that time does not become a feature in negotiations
- Flexibility: approach renewal with an expectation of changes being required and be prepared to consider alternative options. This will require flexibility in terms of programme structure, insurers utilised, and in some cases coverage priorities
- Communication: agree a clear communication plan as part of the renewal process. This should include both formal ?milestone? dates, and regular informal discussions with insurers and your broker
- Relationship management: strong and effective tri-partite relationships assist in achieving the best outcomes in renewal negotiations. Evaluate your current relationship profiles and develop plans to enhance these
- Information: work with your broker to review how your risk is presented to insurers and have a clear strategy to collect the information insurers require, supported by clear analytics.
- Investment: if you have made investments in people, IT, Training etc. Please be sure to highlight these so insurers can identify the positive changes occurring in your business.
For the first time since the pandemic in 2020, there are reasons to be optimistic heading into renewal, and for those firms who commit the time to preparing a quality presentation and choose the right representative(s) to articulate this for them, there is no question that this will present a huge advantage to them once final quotations are delivered.
Lockton would be delighted to engage with any prospective firm and ascertain whether we can add value to your process this year. Please do contact me and I can arrange for a call should this be of interest.