The market for professional indemnity insurance across 10 European countries – Austria, Belgium, France, Germany, Italy, Netherlands, Poland, Spain, Switzerland and the UK – will be worth around €7.5 billion [$10.33 billion] by 2017, according to a forecast from market research consultants at London-based Finaccord.
Finaccord said that gross written premiums for this form of insurance amounted to around €6.78 billion [$9.339 billion] across the 10 countries in 2013, having grown from approximately €6.15 billion [$8.47 billion] in 2009. The UK is estimated to have the largest market, followed by Germany and France. Moreover, gross written premiums grew between 2009 and 2013 in all countries other than Spain.
“While the pricing of professional indemnity policies has been soft for several categories, including, for example, accountancy and finance and legal services in most countries, other segments have seen rapid growth in premiums,” said Bernd Bergmann, a consultant at Finaccord.
The report says the cost of negligence claims for medical specialists has been “rising at an especially rapid rate” in recent years, making medicine and dentistry (including hospitals) the fastest growing professional indemnity insurance market in Europe between 2009 and 2013.
In addition, insurance is being made compulsory for an increasing number of professionals, most notably in Italy for architects and engineers.
According to the study, many enterprises acquire professional indemnity cover through affinity schemes set up by professional associations. As a part of its research, Finaccord surveyed 1,125 associations across Europe and found that 464 (41.2 percent) had established such a program. The countries in which such schemes are most commonly in evidence are the UK (with a provision rate among professional associations of 62.7 percent), Germany and Italy (50 percent each) while they are least widespread in Poland (19 percent), Spain (32.2 percent) and the Netherlands (32.7 percent).
Finaccord’s report examines how the market will develop across 12 distinct professional categories: accountancy and finance; alternative medicine; architecture and engineering; broadcasting and publishing; estate agency and property; financial and insurance intermediation; healthcare-related services; IT and business consulting; legal services; marketing; medicine and dentistry; and other professional sectors.
Specifically, Finaccord said it anticipates growth across all 12 sectors ranging from a low of 0.6 percent as a compound annual growth rate in the case of the broadcasting and publishing segment to a high of 4.3 percent in the fields of both alternative medicine and IT and business consulting.
“Growth in professional indemnity cover for some segments is highly correlated with trends in the underlying number of insurable enterprises,” said Bergmann. “While there are good reasons to insure the liability risks of media professionals, this market is currently held back by the stagnation or actual decline of the publishing sector.
“Given strong increases in the number of insurable enterprises for both alternative medicine and IT and business consulting, growth for the professional indemnity insurance market is expected to be especially strong for these two segments.”
In terms of revenues, Aon and Marsh are by far the largest commercial non-life insurance brokers in Europe. Finaccord said its research indicates that they are also the leading brokers of affinity programs for professional indemnity insurance in Europe, although their overall share of these partnerships is relatively low at 10.6 percent in the case of Aon (including its UNITA subsidiary in Germany) and 4.5 percent for Marsh.
After Aon and Marsh, affinity programs are handled primarily by brokers with a focus on just one national market, the report says.
Bergmann said that the generally fragmented picture among insurance providers confirms the specialized nature of professional indemnity insurance. “By necessity, many commercial insurance brokers are specialists and professional associations are most likely choose brokers with a detailed understanding of the particular risks faced by their members to run their affinity scheme,” he said.