Professional Indemnity Insurance is designed to provide financial protection for professionals against civil liabilities they might face in the conduct of business and performance of professional services.
As the pandemic recedes in 2021, borders will reopen. The economy will gradually recover, but a lot of uncertainties remain. Price adequacy remains at the forefront of insurers’ approach to underwriting, and while the regional and local markets continues to be well-served on Professional Indemnity Insurance, the focus for insurers has intrinsically shifted to profitable growth and long-term stability.
In this article, we briefly examine how the landscape of Professional Indemnity in Singapore has evolved in recent times and delve into how this class of insurance may further develop in the near future.
Before 2019, the market was saturated with insurers eager to grab a slice of the pie. Thus, businesses who were offering professional services were able to enjoy access to competitively-priced Professional Indemnity insurance with broad policy coverages, at competitive prices.
However, the tide took a turn in 2019, when there were early signs of rate hardening. Unfavourable underwriting results in the Architecture and Engineering sectors materialised, amplified by overwhelming foreign and domestic losses. This worsened with the onset of COVID-19, which led to further hardening of rates.
Professional Indemnity underwriters now supplement their risk assessment with details of how companies are dealing with the pandemic, due to:
Businesses are increasingly recognising the importance of having an effective risk management program in place. Professional Indemnity Insurance is undoubtedly an integral part of risk management program, and the increased awareness is driving a change in the market too.
Gone are the days where only traditional professions such as engineers, lawyers and accountants form the demand for Professional Indemnity insurance. Today, a broad range of other professionals, such as marketing & management consultants and technology professionals, are fast catching up.
In recent years, Chubb in Singapore has seen a sharp increase in the number of clients requesting for professionals to maintain Professional Indemnity coverage for the duration of their professional contracts. This is particularly prevalent in the consultancy sector and for clients based in mature markets such as North America, Europe and Australia.
The prospects of Professional Indemnity insurance market remain favourable despite the rising premiums and market conditions which are driving insurers to be more selective on risks. Insurers in Singapore are still offering adequate capacity on reasonable terms that commensurate well against the risks.
One thing is for certain – Professional Indemnity insurance is an important aspect of any effective risk management program, and the demand for Professional Indemnity insurance in Singapore will continue to grow together with the strengthening of businesses’ reliance on professional services.
Written by Jeremy Leow
Jeremy is a Financial Lines Senior Underwriter at Chubb in Singapore, with a focus on underwriting Professional Indemnity insurance. Jeremy embarked his legal career with both local and international law firms before entering the Insurance industry in 2016.
Contact Jeremy for more details: Jeremy.Leow@chubb.com
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