The PI market is hardening and it will only get harder as we head towards the end of the year and into 2021.

Obtaining cover for many professions is proving challenging and, for some customers, it might be impossible to get cover at all.

Brokers’ own E&O is proving very tough. COVID-19 has led to something of a ‘lockdown’ for this class with a number of departures from the market and very, very few insurers writing new business. The FCA’s requirements in relation to brokers’ own PI are open to interpretation and a number of insurers are excluding claims in connection with COVID-19 entirely.

The marketplace is tough and clients are understandably becoming harder to handle. Many are seeing their premiums continuing to increase, coverage becoming more limited whilst others have been frustrated that their insurances haven’t responded to the pandemic.

This is not the cheeriest of news and when I talk to brokers I find that they are falling into two categories:

1. Some brokers sound as though they want to go back to the soft market, which was with us for over 15 years. These times were easier and seducing a client with the promise of a premium saving was a quick win. Also, underwriters were keen to write business and offered broad cover. Now I often hear brokers exasperated by underwriters who never respond, even to decline a risk. A downside of working from home and email is that it can be easier to hide.

2. There are other brokers who seem to be thriving right now. This isn’t just those brokers who were around during the last hard market. A number have evolved and adapted their approach. PI rates have increased but they are only now getting back to where they were in the last hard market. This is not a case of underwriters exploiting the market but the natural correction needed after a long period of underwriting losses driven by rates being too low.

Customers have been on the receiving end of the soft market sell for a long time; re-educating them to the harder market environment was never going to be easy. But brokers who have communicated and pushed the message of a harder market being here for more than 12 months are seeing the benefit. Managing clients’ expectations is never easy. As an industry, communication has not always been a strength. But pointing your client to correspondence and clear messaging can help over a period of time and can make a difference.

There are also brokers who use the example of their own PI premiums increasing significantly with clients, to demonstrate sharing the pain. They have all remarked that they can hardly tell their clients to pay more and then quibble over their own premiums increasing, when they have had the benefit of the soft market. But, for brokers right now, it is a very tough market and not all brokers can get cover for Covid-19. Our own view is Covid-19 cover for brokers is something that should be considered and provided where possible.