Rate relief creeping into PL lines despite claims growth

Rate softening is beginning to creep into the professional liability market, despite continued pressure on claims, said speakers at Thursday’s “Errors & Omissions” seminar hosted by the Toronto Insurance Conference (TIC).
The seminar looked at broker E&O, but expanded quickly into a discussion of the professional liability (PL) market, where speakers say the overall trend to increasing competition is being seen, even as court cases and awards highlight claims growth concerns.
Over the hard market, brokers faced challenges in their own E&O purchases, specifically with rising deductibles. But, these changes reflected the realities of the marketplace, notes Rod Finlayson, executive vice president of CG&B Group. “In many ways we are just dragging ourselves into the 21st century.”
While results have improved for carriers writing PL lines, some segments may still be rate inadequate, and speakers questioned the onset of competition they are seeing overall. “I’m seeing competition from regular markets,” notes Hugh Fardy, vice president, broker liaison for Encon Insurance Group. He expects that while “truly professional liability” writers may not move into Canada, more regular insurers appear to be moving into the market. Some may be tempted, because they have had some success in one specific line or industry, into thinking they should write a host of PL lines over a variety of industries.
But claims in the segment continue to grow. Specifically directors’ and officers’ (D&O) claims from publicly-traded companies facing shareholders lawsuits continue to make headlines and are being seeing more and more frequently in the Canadian market. Some players in the Bermuda market are “slashing and burning” D&O premiums to retain business, but this does not jibe with the claims coming down the pike, stresses Matthew Davies, Canadian manager for professional and media liability at Chubb Insurance Co. of Canada.