Argo Pro Shares Top Trends in Professional Liability Insurance

Argo Pro’s Top Trends in Professional Liability Insurance

At the mid-year mark, Argo Pro leaders take stock of trends across professional liability lines and offer insights into what’s next.

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From accountants to architects and myriad professional exposures in between, leaders at Argo Pro share their top trends in insurance for professional liability.

Miscellaneous Professional Liability (MPL)

Trends to watch

  • Real estate continues to lead the MPL insurance market in terms of opportunity. With the market stabilizing, people are looking to real estate to diversify investments.
    • Although building occupancy rates are at an all-time high, we are starting to see an increase in the purchase of primary residences and investment properties.
    • MPL markets are flooded with real estate agent/broker and property manager submissions.
    • Many baby boomers at or near retirement age are downsizing to smaller places, often managed by third parties. This will continue to drive real estate agent/broker and property management opportunities in the market as a whole and especially in the real estate development market.
  • Technology is another area of significant growth and infiltrates all aspects of the MPL product. Two good examples: companies offering client portals on their websites for billing and reference purposes and the use of mobile technology by claims adjusters.
    • Look for an increase in traditional MPL services that either feature a tech component in the transaction or are provided via app or online.

What this means

On the tech front, we must look closely at how these traditional exposures have changed just by virtue of how the services are now being rendered.

In terms of real estate risks, we may see more real estate developers working on assisted living projects. Underwriters will need to underwrite to these new exposures, such as ancillary and incidental medical malpractice exposures (e.g., patient care, wellness programs and medication administration), and limit these patient-care/traditional allied health/medical malpractice-type services while still being a viable real estate market.


Architects and Engineers Professional (A&E)

Trends to watch

  • Insureds seeking coverage online rather than through an agent, particularly among insureds with less than $1 million in revenue.

    Dan Gmelin SVP, Head of A&E and Miscellaneous Professional Liability
  • Continued expansion of coverage available on one form. One example: broadened coverage for contractors professional to pull in claims that might typically have been handled via an environmental policy.

What this means

Disruption to the typical distribution channel creates an opportunity to capture part of the emerging online distribution channel. This trend creates the potential for insureds who have purchased inadequate policies to return to the traditional distribution channel.

If forms continue to move toward broader coverage, additional underwriting and review will be needed to make sure the rate accurately reflects all exposures. In the event of such an expansion, insurers will need to be sure their different segments aren’t placed in competition with each other.


Lawyers’ Professional and Accountants Professional

Trends to watch

  • The accountant and lawyer professions will see significant changes in the next few years affecting how services are delivered.
  • These changes include technological advances such as automation and the use of artificial intelligence.

What this means

Given the massive use of data, insurers are going to have to be prepared for the changes in exposures that come with this trend. Insurers will have to analyze the ability of firms to proficiently deliver their services and must be able to use available data to analyze risk without overcomplicating the insurance process.

Bill Healey
VP, Underwriting – Risk Management
Lawyers’ Professional Liability and Accountants’ Professional Liability

These trends will force everyone in the chain, including the client, professional, broker and insurer, to be smarter about how they address client relationships and exposures.

While these professions were built on relationships and customer service, efficiency and accuracy are going to become increasing components of the equation.

Protecting client information and data security will be even more important. Law and accounting firms who are financially or culturally unable to embrace these changes may find themselves unable to compete.

Financial Institutions

Trends to watch

  • The Financial Institutions market was lagging behind Commercial when it came to rate increases, but the market is starting to see more rate come through and continued limit contraction.
    Mary Henderson
    SVP, Head of Financial Institutions

What this means

Expect the trend to continue in FI. The classes expected to be most impacted by the rate increases are large private equity firms and large banks.


Commercial Management Liability

Trends to watch

  • Continued dislocation from a hardening D&O market.
  • Rates will continue to increase for all regardless of claims history.

What this means

Rich Edsall
SVP, Commercial

Pricing is increasing for all public risks. This is especially true for more challenging areas such as IPOs, tech and biotech, where there have been and continue to be significant price increases.

Drivers for rate increases include the increase in the number of claims throughout the marketplace, loss costs increasing due to rising defense costs, and low pricing over the last 10 years. There have also been a handful of carriers reducing capacity, as well as some exiting the market entirely, both of which have contributed to the changing market. The main classes impacted by rate increases include public companies, private companies in California, large banks and large private equity firms.

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