Griffiths & Armour Europe DAC PII

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�� ������������������������������ ������ ������������ �������������������� ’ Since, then the predicted withdrawal of insurers from the PI market has accelerated, resulting in a market today which is severely short of insurer capital. Put another way, there are not many insurers left. The spring has been fully released and for some it has indeed broken. Weekly, we are encountering firms that have been unable to source insurance protection, are struggling to achieve the indemnity limits they previously held or are facing PI premium increases of several hundred percent. The insurers who remain in this sector are largely free to pick who they choose to work with and on what terms. Those that have tried to take that ‘moderate path’ and continue to secure market support face a number of dilemmas: There is a need to boost the premium pot available to meet the ever-increasing claims burden that the insurance market has to bear. But it cannot be right to indiscriminately triple or quadruple premiums as some markets have done. There is a need to recognise the potentially catastrophic impact of ‘fire safety’ claims on the PI market and protect insurers from their worst fears of insolvency. But it cannot be right to simply exclude all cover for this activity as many have done. There is a need to tread the potentially difficult journey ahead with caution, delicate balance and foresight. That considered approach is one that we recommend – and we hope you agree that is what we have done. As custodians of the safe haven that many of our clients have relied upon for decades, we can’t shrink from warning again of the troubles ahead and this document is part of a series of publications that we’ll be issuing over the next few months covering the market changes we can expect through 2021 and beyond.

�������� As mentioned above, many of the challenges faced by the PI market are global. They are not peculiar to Ireland, or indeed the UK, but there are particular concerns and some broader issues that are more pronounced locally.

In construction PI, liabilities are notoriously long-tail and quite often, a very small number of claims can