‘Accountancy will be one of the sectors to feel premiums hardening,’ said Gary Head, UK underwriting manager at Hiscox Insurance this week. It’s not unreasonable to expect premiums to rise by between 10 and 20%.’
According to Head, rates have been low, or ‘soft’, for some time, but that the market is now hardening. Although not a major player, Independent’s rates tended to be among the lowest in the industry and its fall means accountants face rising prices.
Independent entered voluntary liquidation last month following the decision to suspend its shares and stop writing new business. Initial concerns over the state of the insurer arose in May when actuaries from Watson Wyatt found large claims had not been entered into the insurer’s accounting system. Watson Wyatt had previously provided Independent’s actuarial certificate and KPMG had signed off its 2000 accounts.
Shortly after the collapse there were concerns that accountants were unwittingly practising without cover, leaving them open to massive negligence payouts if they are sued. The ICAEW said it had received a large number of calls from members worried about their policies.
But liquidators from PwC said on Monday that they would be writing to those affected urging them to change their insurance arrangements.
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