Charles Binns, Divisional Director of Professional Risks at London-based broker Cooper Gay, told delegates at last week’s BrokersLink Global Conference that the introduction of new laws in a number of countries, making professional indemnity insurance obligatory for a wide range of professions, is leading to increased distribution opportunities for brokers.
As an example he notes a law passed last December that made Portuguese public officials personally liable for acts of “gross negligence.” As a result, the state is obliged to make use of the right of recourse against public officials. Spain has passed a similar law. In addition, a revised article of the Portuguese Commercial Companies Act made it mandatory for directors to provide a guarantee against personal liability.
Binns told delegates: “The opportunity for brokers is clear – we now have large numbers of potential clients who need to purchase specialist insurance, not out of choice, but as a result of legislation. The individual premiums may be low, but the large overall market for providing these fairly simple professional liability products will be very attractive to underwriters.
“The complicating factor in these immature markets will be a low level of awareness of need. However, this will be offset by limited competition for pioneering brokers. As a result, convincing clients that they need these products and delivering a product that conforms to the specific legislation of individual countries will be the real challenges.”
He also told the conference that to succeed in these emerging markets, brokers need to identify the new risks then find cost effective routes to market such as partnering with industry bodies. In addition, he highlighted the importance of exploiting cutting-edge technology, such as quote-and-buy platforms, to facilitate efficient distribution.
Cooper Gay Group CEO, Toby Esser, added: “The insurance industry must continue to create innovative products to meet the needs of the constantly evolving professional liability market, in order to protect clients from new risks or to help them to comply with new legislation. As a wholesale broker, our role in this process is to work with retail brokers to drive creativity and help them to enter new markets. While this will take investment from all parties, the upside from capturing an emerging insurance market will be considerable.”
Source: Cooper Gay
IJ Ed. Note: Cooper Gay is in “advanced discussions with U.S. broker Swett & Crawford to combine their operations. See IJ web site – https://www.insurancejournal.com/news/national/2010/06/08/110527.htm ]
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