PI insurance in market disorder

As the global marketplace is assessed, are clients and insurers making more work and spending more money on claims than they have to? Just how easy is it to cut out the PII middle man?

Any marketplace across almost all sectors of business must be evaluated and measured regarding profit and loss. Being a huge global and profitable enterprise, Insurance is the sort of competitive field that requires constant monitoring and involves frequent records checked of financial stability.

A popular and important insurance policy is that of Professional Indemnity Insurance, the income and revenue made on such a product being both high and increasingly valuable. Many insurers however are re-evaluating their margins when it comes to PI insurance, and what has become clear is that much of the cost spent when investigating claims and handling assertions may well be unnecessary. Consultations are taking place across Britain in an attempt to counter this problem of valuing and funding the cost of claims regarding Professional Indemnity Insurance.

The current market has been referred to as ‘dysfunctional’, and the UK valuation sector have been called to tackle the increasing problem. The magnitude and budget of managing apparent negligence claims continues to have ‘significant impacts’ regarding the price of PII, a problem that both companies and clients could do without. An insurer may well be selling cheap PI insurance, but because of the way that money is spent handling possible claims of negligence, as a result both parties suffer.

This problem affects not only small and large businesses, but the insurance market as a whole, and with help from participating firms and the UK valuation sector, this growing problem will hopefully be rectified. By updating the system and making the process of managing claims regarding PI insurance easier, these operational glitches would not only increase client protection, but create a safer and more cost effective way of managing the insurance market.

By:Steven Bailey

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