1 QBE European Operations Welcome to Professional Indemnity Insurance for Solicitors from QBE
2 QBE is one of the world s leading insurers and reinsurers. We re also the largest insurer of solicitors in England and Wales. Thanks to our overall experience and reach, we enjoy a holistic view of the entire UK solicitors market, delivering key insights into the professional indemnity sector. The sheer size and diversity of our client base has provided us with a privileged view into the practical requirements of solicitors a vantage point that can be applied to your firm, when you decide it s time to re-evaluate your risk position.
3 QBE Professional Indemnity Insurance for Solicitors 1 Competitor activity and market pricing risk 10% 31% Volatility and trends in prices of material inputs and goods purchased Cyber crime and data security risk 6% 18% Trade credit (i.e. customer insolvency) risk 5% 23% Lack of availability and quality of skills and talent 6% 19% Supply chain risk 1% 15% Financing risk (i.e. access to capital and cost of capital) 3% 15% Physical and people security risk 3% 8% 7% 39% Lack of visibility of customer orders/revenue 4% 17% % respondents Increased significantly Increased somewhat QBE nsurance Co nsurance Plc al Corporate t Europe Ltd a Insurance Europe Ltd al Insurance iality Europe bra Barbican nsurance Co nsurance Plc surance Ltd y Insurance nsurance Co surance Ltd al Insurance ke Syndicate A Insurance Canopius dicate 2001 ndicate 4711 e Europe Ltd Proposed SRA changes to the MTC creates concern The Solicitors Regulation Authority (SRA) has come under pressure from a number of influential legal bodies over impending plans to change the Minimum Terms & Conditions (MTC). A number of trade publications report that The Law Society, the Council of Mortgage Lenders (CML), the Legal Services Consumer Panel, as well as various insurers and brokers have all expressed concern at some of the proposed changes. There is also a feeling that decisions were taken too quickly, often without sufficient time for proper consultation. The news was tempered somewhat by the SRA s decision to limit the mandatory minimum level of compulsory cover to 500,000, bolstered by new requirements that firms must have an appropriate level of indemnity insurance cover. Some of the proposals that were deferred by the regulating body include proposals on eligibility criteria, aggregate limits and shortened run-off cover until 2015, as part of a wider review of indemnity insurance arrangements. The general concern is that some of the changes could pose a serious threat to clients and firms, and calls were even made to push back the 500,000 compulsory % Participation cover requirement as well. The Legal Services Board now have until August 2015 to consider this, following an extension issued on 18th August A look at the top 2013/2014 Qualifying Insurers QBE Travelers Insurance Co Zurich Insurance Plc Allianz Global Corporate Am Trust Europe Ltd Alpha Insurance AIG Europe Ltd International Insurance Axis Speciality Europe Libra Barbican Elite Insurance Co First Title Insurance Plc XL Insurance Ltd W R Berkley Insurance Enterprise Insurance Co Aviva Insurance Ltd Liberty Mutual Insurance Pembroke Syndicate RSA Insurance Canopius Amlin Syndicate 2001 Aspen Syndicate 4711 Ironshore Europe Ltd % Participation
4 2 QBE Professional Indemnity Insurance for Solicitors There is always a degree of risk involved in doing business. However, economic circumstances are forcing businesses to expose themselves to higher levels of risk at a time when their risk controls are not being robustly managed. While fortune can favour the bold, I would strongly urge local companies to consult with their insurer to explore ways of mitigating the potential impact of these increased exposures. Matthew Crane, Managing Director UK & Ireland at QBE on the current UK risk environment Questions? Contact your QBE representative today at
5 QBE Professional Indemnity Insurance for Solicitors 3 The leading underwriters within our chosen markets. Through 30 years experience of underwriting professional indemnity in the London market, we have established longstanding relationships with brokers and clients. Solicitors professional indemnity insurance has a minimum terms wording and mandatory limit requirement (as prescribed by the Law Society). QBE adds value to this standard through: Flexible excess structures, and primary coverage above the mandatory limit A risk management service which provides strong support in volatile trading environments A portfolio that contains a balance of clients, ranging in size from sole practitioners to multinational firms. Our products and services are tailored to the practical requirements of solicitors Quotations delivered by empowered, experienced underwriters Effective and transparent pricing models, refined over many years Claims dealt with by empowered and qualified handlers Consistent pricing, clear terms and conditions, in a uniform, structured format. An effective specialist claims infrastructure, just for solicitors Our specialist Professional Indemnity claims team has extensive experience managing claims both in the UK and abroad. They re closely aligned with our underwriting teams, which allows us to tailor our claims service according to client needs, as well as take a long term view on pricing. Questions? If you have any questions please contact us at QBE are one of the small number of insurers who have written the business continuously since the demise of SIF, in The benefits of that continuity and long-term view are there for everyone to see. Grant Clemence, QBE Head of Professional and Financial Lines
6 4 QBE Professional Indemnity Insurance for Solicitors QBE by Numbers We are the number one provider of PI for Solicitors in England and Wales. 27 QBE has won 27 major Insurer awards over the past 5 years 18.2% Market share Underwritten Solicitors since in 10 The chosen primary insurer for 8 out of the top 10 UK firms
7 QBE Professional Indemnity Insurance for Solicitors 5 25% lower level of claims Solicitor firms who engage in a QBE risk management self-assessment process, experience 25% less claims than those who don t. Consistently one of the TOP 5 providers of Solicitors PI Insurance in England and Wales since 2000 We insure solicitors in more than countries Launched our QRISK service in 2011 to help our solicitors better manage risk
8 6 QBE Professional Indemnity Insurance for Solicitors Firms who engage in a QBE risk management self-assessment experience 25% fewer claims than those who don t. Self-assessment is our primary, quality assurance-based risk management service for solicitors, either insured or seeking insurance. This process uses a quality assurance focussed questionnaire to: Provide a rigorous benchmark against which solicitors can assess their risk management controls Raise awareness across a broad spectrum of operational, regulatory and business risks Assist practices to fulfil their compliance obligations Enable underwriters to view individual firm s risk profiles, delve into strengths and weaknesses of practice management and make more informed underwriting decisions Enable underwriters to tailor coverage and risk management support solutions accordingly.
9 QBE Professional Indemnity Insurance for Solicitors 7 Benefits of QRISK on your claims experience are unmistakable, and the premium benefits of this are clearly visible to anyone who undertakes it. Mark Casady, Portfolio Manager, QBE PI Introducing QRISK managing risk just became a little bit easier A unique feature of our professional indemnity product is our quality assurance and risk management initiative (QRisk). It s an interactive online platform designed to make risk easier to understand and manage It s designed to assist even the smallest client implement an appropriate quality management system, and evidence a systematic approach to risk management It has been tailored to respond to the needs of the legal profession, and is widely used by solicitors practices across the UK and Europe. Experience QRISK at QBEeurope.com/risk-solutions/qrisk/ Or us at for more information.
10 8 QBE Professional Indemnity Insurance for Solicitors QBE provides a unique quality assurancebased approach to risk management. It was developed for solicitors practices of all sizes, democratising a service that has commonly been the preserve of larger organisations.
11 QBE Professional Indemnity Insurance for Solicitors 9 Risk Management An interview with Deborah O Riordan, QBE Professional Indemnity Practice Leader. Can you tell us a little bit about your background and experience in professional indemnity/ risk management? I ve been a Quality Assurance and Risk Management professional my entire career, initially in industry, and then as an independent consultant. I joined QBE nearly 10 years ago - it s actually my tenth year anniversary on 14th October time flies! I have a lot of experience in the solicitors market, over 15 years. At first, it was just helping firms to implement management systems and achieve quality standards such as ISO 9001, Lexcel, Investors in People, and SQM (the old LAFQAS standard). I also did a lot of work with barristers, establishing management controls in dozens of barristers chambers to help them achieve the Bar Mark Standard. What s your assessment of the current risk landscape, both in terms of companies seeking to protect themselves and providers such as QBE working to design and deliver optimal risk solutions? Professionals today are much more aware of risk than ever before they can t not be as they re bombarded with it from all angles! Many of them understand the significance of risk management and the importance of resourcing up accordingly. Some are even drafting in risk managers from other professions accountancy, financial services, surveying and so on, which can be a good thing because it delivers a different perspective on risk. But many are still focused on little more than compliance, which is odd because a serious PI claim can have a much more damaging effect than a squabble with the regulator about breaches records. So awareness has improved but we re not there yet. One of my big concerns is that practices are not as effective at preventing a recurrence of the problems they run into as they could be. Often they lack resources, or they may not have the right mix of skills to effectively protect themselves and their business against a repeat of past errors. We ve also seen an increase in M&A activity which is shaking up the profession. But this is a new aspect of business management for many firms, and hence there s risk with these emerging opportunities. We ve actually produced a basic toolkit for smaller firms, which helps them consider all the necessary factors for lateral hires, as well as include risk management comparisons, as part of the due diligence process. Cyber risk is also getting a lot of attention at the moment. The legal profession seems to be viewed as a bit of a soft underbelly, an area which might easy to penetrate. But the new Cyber Essentials standard is
12 10 QBE Professional Indemnity Insurance for Solicitors on its way, and hopefully, it will be used as a benchmark and adopted by the profession. QBE is working on another tool in that area, and that s very promising. It s also clear that financial instability for some firms hasn t gone away completely. There always seem to be rumours of another big failure about to happen and we certainly pay a lot more attention to financial indicators than we used to. Can we talk about the real estate field. It always seems to be an area that people pay a lot of attention to. Well that s not surprising considering the value of the assets involved always seem to be spiralling ever upwards. And, recently, there have been signs that the market is heating up again. A lot of people seem to be experiencing difficulties in resourcing back up to meet demand and that s a real danger firms really do need to try and get ahead of the curve instead of playing catch up once its too late. The hope is that the lending restrictions might keep things a bit more under control this time as we can t afford to go back to the all nighters, the last minute JVs and rushed deals, missed registrations and payments, and of course the seemingly higher level of defective leases, rent reviews and break clauses they are still coming out of the woodwork from the last slump (sighs). And how would QBE go about identifying potential problems on behalf of firms? QBE has developed a range of risk assessment tools to try to get firms asking the right questions about the controls they have in place across a broad range of business risks. Our approach has always been quality assurance-based, so I believe we have a much more holistic approach perhaps than other risk management systems. I think that s where we stand out. I recently attended a seminar session on the proposed changes to the ISO 9001 Quality Standard. The linkages to risk management that they are beginning to arrive at and talk about are a great validation of the QBE philosophy regarding use of the holistic QA model, and the continuous improvement approach to risk management. What else makes QBE, in your view, stand out as a comprehensive and experienced provider of risk management in the UK market? Well, as I mentioned, our holistic approach is fundamental to the way we deliver results to our clients and we ve applied this since the market opened up in 2000/1. We ve also invested significantly in ensuring we have an optimal balance between in-house resources and external expertise. This ensures that we re constantly exposed to fresh thinking. There s also QRisk, which is great. The remote risk assessment tools delivered by QRisk means that a basic risk management package is available to all our policyholders no matter how small. And for larger firms, we can develop something more hands on and bespoke to suit their individual requirements. Lastly, and most importantly, our risk management team is comprised of some very experienced people who ve worked with solicitors for a long time and understand the profession. Many are, or have been, independent consultants who have carved a successful practice of their own. You can only really do that if you achieve the right outcome for firms, there s no faking it. The right outcome of improved risk profiles benefits everyone, so it s a classic win-win. You mentioned the bespoke products and services offered by QBE? Can you illustrate this for the solicitors market? It always start with open dialogue but that will only be achieved if we gain the trust of the people we are dealing with. We re happy to explain processes and share case studies (anonymously, of course!) where we ve helped other firms (from SME s to top-20s) to demonstrate the potential benefits of engaging with our Risk Solutions team. We look at individual claims histories, the areas we know have caused problems in other businesses, the firm s own development goals, and any issue they think is important or causing concern. Even where a business has already got in place the right risk management framework, there can be areas where it s not working as well as it might. A forensic claims review can give some really good insights into the weaker areas. We are happy to invest time in this as we know it gets to the heart of the problems and everyone benefits from it. If claims is not the issue, we can always carry out a more generalised business process review and help engineer these to mitigate risks further. It s just basic continual improvement, or if you like your sporting analogies, Performance Improvement through the Aggregation of Marginal Gains. Deming came up with it first but it s been cited as the root of success by British head coaches in cycling, cricket, and rugby, before that. You ve got to be bothered with the small percentages and that s a big challenge as not everyone thinks like that. That s also why you need skilled and dedicated RM and QA resources to drive that process. All those single percentage points and half-percents, add up to reduced risk, better quality and improved client satisfaction. Those are the standards we set for ourselves. And finally, if a client walked in the door, unsure of what they needed or how to go about it. How do you approach them what s your secret in a nutshell? (Laughs) Be human, be understanding, listen, explain the benefits to their specific circumstances, and work in partnership. Its just people working with people, not a scary insurer coming in to rip things to shreds and dictate the changes, as many expect us to do. I can say that here as they can t see my two heads and scaly coating (Laughs).
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14 12 QBE Professional Indemnity Insurance for Solicitors QBE can help with your professional indemnity insurance 28% of UK businesses consider the trading environment to be riskier now than it was 2 to 3 years ago Solicitor firms who engage in QBE risk management self-assessment, experience 25% fewer claims than those who don t QRisk is a straightforward, informative and above all, effective way to help you manage risk within your business and it s completely free of charge QBE has over 30 years experience of underwriting professional indemnity, with products and services tailored to the practical requirements of solicitors. Manchester / Greater Manchester 18% 45% Bristol / South West My company s tolerance 8% 49% of risk has increased over the last 2-3 years Interested? Contact your QBE representative today at ALL REGIONS 12% 42% Glasgow/Scotland 14% 26% Leeds/Yorkshire 9% 41% Birmingham / West Midlands 15% 48% London/within M25 ALL REGIONS 10% 41% 12% 42% Glasgow/Scotland 14% 26% Strongly agree Agree somewhat Manchester / Greater Manchester 18% 45% Bristol / South West 8% 49% Leeds/Yorkshire 9% 41% Birmingham / West Midlands 15% 48% London/within M25 10% 41% Strongly agree Agree somewhat
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16 16 QBE - Name of document QBE European Operations Plantation Place, 30 Fenchurch Street, London EC3M 3BD tel +44 (0) QBEeurope.com QBE European Operations is a trading name of QBE Insurance (Europe) Limited and QBE Underwriting Limited, both of which are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 4729GC/PIforSolicitors/September2014