Telling your compliance story; PII renewals and risk

Professional indemnity insurance is a fickle market. Conveyancing firms are once again navigating a market that remains challenging, nuanced, and increasingly shaped by risk culture rather than raw numbers.

Renewal season is the backdrop to this latest Today's Conveyancer Podcast discussion with Miller Insurance account managers Marianne McWilliams and Phil Limb who lift the lid on what insurers are really looking for and why firms need to rethink how they present themselves.

Appetite for conveyancing work has improved say McWilliams and Limb, but insurers are scrutinising firms more closely than ever, particularly around expertise, file supervision and risk management.

Limb reiterates the point many insurers have made in recent years; dabbling is dangerous. Firms undertaking only a handful of transactions must demonstrate robust systems, specialist case management and clear referral points. “If you are doing a low amount of conveyancing, it’s about proving the expertise… and that you’ve got referral points at certain critical points” .

Technology is now central to that story. Specialist case management systems, automated checkpoints and emerging AI tools can all strengthen a firm’s risk profile but only when used intelligently. McWilliams cautions that AI requires rigorous due diligence and human oversight: “if you ask the wrong prompt… you’re not going to get the right answer” .

Insurers are also watching emerging risks closely, from crypto‑related funds to cyber incidents. 

The takeaway is clear: firms must articulate their risk culture, not just their compliance. Insurers want clarity, candour and evidence of control. Conveyancers who can demonstrate that story will be the ones securing the best outcomes when it comes round to renewal.

The Today's Conveyancer podcast can be found on your preferred podcast provider and also at www.todaysconveyancer.co.uk. Subscribe and listen in for all the latest conveyancing industry news and views. 

Thank you to our podcast sponsors LEAP Legal Software

Transcript

SPEAKER_00 0:00

You're listening to the Today's Conveyanza Podcast, the leading source of information for residential property lawyers in England and Wales. Don't forget to subscribe and sign up to our free newsletter at today'sconveyancer.co.uk. You can also follow us on LinkedIn and Twitter.

SPEAKER_02 0:21

Hello, welcome along to the latest Today's Conveyance Podcast. Today we're talking about professional indemnity insurance and who better to talk about it with than Marianne McWilliams and Phil Lim, account managers at Miller Insurance, both head or joint heads of their CLC team. But the conversation is also going to cover guidance and advice and discussion points for SRA regulated firms as well. Great to have you both on the podcast. It's difficult to find the right time of the year to talk to you guys because you seem to be busy most of the time, to be fair. So really appreciate you finding a window to have a chat with us on the podcast today.

SPEAKER_03 1:02

Good to be here.

SPEAKER_01 1:03

Yeah, thank you for the invitation.

SPEAKER_02 1:06

First instance, it's useful to get a bit of background to our guests. So uh Marianne, perhaps you wouldn't mind starting by telling us a little bit about yourself and your role, please.

SPEAKER_01 1:18

Well, I'm one of the account managers here, as you as you said, and I've been doing that role for over 30 years. So I love getting to know whichever firms that we're working with, helping them work out how best to showcase themselves to their insurance and getting them a good deal and a good outcome at the other end. As I said, I've been doing that for about 30 years. So I've been involved with law firms for the last 11 or 12.

SPEAKER_03 1:43

Fab, thank you. And Phil? I've been in the market for about 25 years now, since the devise of SIF basically. I started at Zurich as an account manager and uh underwriter and worked there for about 12 years and then moved into Broaking initially with a small, small regional broker, and then joined Willis um in 2013. I I then did take a break from insurance and ran an organic veg business in Devon for about eight years. But the the law of insurance was too much, and I I came back three years ago. Primarily because of Miller. I I'd worked with a number of the team previously, and and what they were trying to build at Miller really excited me. And post-COVID, it allowed me to work from home in Devon, but but pop up to London once a week to see the team, see the underwriters, and really be involved in the business. And I I I thoroughly enjoy the time at Miller.

SPEAKER_02 2:35

Bab, thank you. So the conversation today is about professional indemnity insurance. We we started just before the recording by calling you a necessary evil, and it's a very unkind moniker, apologies for it. But you know, there is a reality to running law firms where obviously you have to have professional indemnity insurance. And certainly over the last couple of years, for conveyances in particular, it's been a really difficult place to be. It's been a very hard market. I mean, talk of premiums rising in double figures year on year. What's the condition of the current PI market as far as you guys understand it and see it?

SPEAKER_01 3:16

It's still quite interesting. So there's definitely a distinction between SRA and CLC firms. For the SRA, there's a much wider panel of insurers potentially available to them, although they tend to segment themselves based on criteria like partner sizes and the amount of conveyancing that a firm's doing. So different size firms and different profiles of firms are going to have different options. Broadly, for an SRA firm, market conditions are relatively favourable. Insurers have been increasing their appetite for the amount of conveyancing a firm does, but they do still want to know about key things that that firm might have been doing in the past. And our job is to help guide each of the firms that's looking for insurance to who is going to be the appropriate solutions for them, and that involves some fact-finding that's probably outside of the proposal form. Situation for CLC is slightly different in that that is a much smaller pool of insurers, and the insurers tend to be aligned to sort of three or four key brokers. Obviously, the CLC publish a list that's available to their membership. I think the insurers in that space are much clearer in terms of what they value about conveyancing and the fact that CLC are professionalists, our specialists in the profession that they're working in.

SPEAKER_02 4:42

I mean, certainly uh I know from conferences I've been to, conversations I've had with insurers, that the volume of conveyancing that a firm does is critical. And there's this real, I guess, discouragement amongst insurers of uh what you might unkindly describe as dabblers. I mean, is that something that you kind of see within within the business that you are actively discouraging practices that are only doing a handful of conveyances on a on a on an annual basis?

SPEAKER_03 5:17

I wouldn't say they discourage dabblers. I think there's a there's an interesting rule with a lot of insurers whether they only look at firms if they do less than 25% or less than 50% of conveyancing, which to me is an interesting one where Marianne pointed out with the CLC they're doing primarily conveyancing, so they are the specialists. I think if you if you are doing a low amount of conveyancing, it's about showing that you've got the risk management tools in place, you've got the case management in place. I think an issue that insurers have is that a firm may try and use the same case management uh system across their whole firm, so it won't necessarily necessarily have the uh the stops or the points in place where it would be referred if you were in a conveyancing specialist uh case management system. So I think if you can, and it goes back to Marianne's point earlier about uh not relying on your proposal form, the proposal form will ask certain questions that an underwriter wants to know, and then really it's up to you as a firm to explain above and beyond that how you're different and the systems that you've got in place to reduce the risk to the insurer. So for those firms that are doing small numbers of conveyancing, it's about proving the expertise of the people that are doing it, showing that you've got the case management in place and that you've got referral points, critical points in that process to ensure that the risk is reduced.

SPEAKER_02 6:35

And I mean, uh talking more generally about the claims market and what it currently looks like, there was a lot of concern uh in the wake of COVID that of course there was going to be a big fallout in terms of claims because you had lots of conveyances who were furloughed, which put a huge amount of pressure on the conveyances that remained. We had the uh stamp duty initiatives, which caused those huge bottlenecks in the run-up to those uh March deadlines. Again, it placed a huge amount of pressure on the profession. Are we starting to see that sort of fallout happen? Is it too early to see that? What's the kind of general status of claims in the market at the moment? It feels as though we're a more litigious society as well, doesn't it?

SPEAKER_01 7:19

I mean, we're certainly talking to people a lot more often about complaints. Their clients are much more prepared to raise complaints, and that might be because they think that that you know it's a way of reducing the fee, or it might be because people are slightly more impatient than they have been in in previous times, or literally it might be that perhaps there are more things that they can genuinely and should genuinely be complaining about. The experience of talking to people is that there doesn't seem to have been this sort of cliff edge that we're expecting COVID to be, where all of a sudden there were there was huge numbers of claims coming through. I think it's difficult though, because there are some delays in the system which potentially could be hiding claims figures. You know, there's delays with with things like Leo, there's delays with the land registry, and that does mean that it might take a little bit longer than perhaps we're expecting for some of these sort of issues that were stored up from COVID or from the stamp duty holidays to take effect.

SPEAKER_02 8:24

And are are you as uh brokers and are the insurers then looking at this and saying well we need to stay prepared for this? Or or are they kind of being a bit more lenient about it now? Do you see?

SPEAKER_03 8:38

I think I think they're always prepared, and I think the the the insurers that we work with are always trying to be proactive about claims, whether that's biofunded development or uh BSA matters. I th I think it's it's a positive that that that they're nervous about it and they're thinking about these things because we can advise clients in advance of them or or to get ahead of them and make sure that they've got prices in place to mitigate mitigate the risks. But that certainly the insurers that we've spoken to, there are no trends that are coming out uh over the last couple of years, over and above uh those that we've seen in the last five years.

SPEAKER_01 9:16

I think the worry is always that there'll be one of these big fraud type losses because they're the ones that are relatively infrequent but quite expensive when they occur. I think the problem with biofunded developments was that firms could get caught multiple times from a relatively small set of transaction numbers. So there are still risks to be aware of, as Phil said. I think a lot of our job and the job that our risk manager does is talking to people around what their appetite is, how they can catch what they're actually not interested in pursuing. So a lot of the conversations we have are around what's firmware risk appetite, what's your onboarding procedure, and what's your exceptions process, so that you are going to find things that you probably don't actually want to be working on at a quite early stage and can take positive action.

SPEAKER_02 10:10

I mean, you you you talked about BSA there, Phil. What's the attitude of insurers towards things like BSA expertise? I mean, even things like leasehold and new build are increasingly complicated, aren't they? And you know, if common hold becomes a thing as the government are keen to do, you know, that feels as though it's going to become another specialism. You know, have insurers kind of started to be much more stringent in their criteria around the types of work that firms take on?

SPEAKER_03 10:40

I think BSA is one that they're they're wary about and and and they take a keen interest in. And and we we get a lot of firms approaches and say we're considering um doing BSA work. And then Mara and I have a genuine conversation with them and ask them how many transactions are you looking to do, why are you looking to do it, what is the expertise you've got in the firm, um, what risk management process have you got going to put in place? And and I would say to someone, if you're doing a thousand transactions a year or 500 transactions a year, why would you take on one, two, three, four, five BSA cases a year for the increased fees that you're gonna raise from those five cases? Because the risk that you're gonna see from those five cases is gonna be much greater than than than from an ordinary case. I think if you've got a member of staff who's an expert in that in that area, you've got a different way of pushing that through your file management system. If you've got different uh referral points to senior people within the firm at different times to your ordinary cases, I think that's a different prospect altogether, and you sure as absolutely accept that. But uh, we do get concerns where somebody said, Oh, it's a long-term client, we just want to do this one. That is a bit of a red flag to us because you haven't got the expertise. In that instance, you'd be better to better for your firm and better for your client if you were to f that one off case to to a specialist. And if you are going to go into BSA, then then do it properly. Either recruit somebody who've got a specialism in it or do a lot of work in terms of seminars and courses, and then make sure you've got those risk management pieces in place uh to do that.

SPEAKER_02 12:19

I want to talk about the forms and the way that firms present themselves to insurers. And I want you to give me the silver bullet. I know you're not going to, but we're going to it would be really great to kind of talk about that. But as you kind of bring up expertise Phil specifically, how much more detail are insurers now looking for from firms around individual expertise? Uh whereas, you know, perhaps previously it wasn't quite so in-depth in terms of individual staff, it was much more about processes and procedures and case management and technology and that kind of thing.

SPEAKER_03 12:56

As I said at the start, I've been doing this for 25 years, and you know, we used to get proposal forms with coffee stains on, with marmalade stains on, areas of practice not added up to 100%, whole sections missing. And I think what people, firms forget is that that is a reflection of your firm. When an undriter picks up your form, that is whether you like it or not, a reflection of your firm. So therefore, make sure if you are going to handwrite it, handwrite it neatly. Most people now fill it in online. Um, make sure you double check the areas of practice add up to 100%. Make sure all the questions are answered. And that's really a basic. But what I would then say is that particularly for an SRA firm, there are about 8,000 firms in the country at the moment. And underwriters literally in April and October sifting through hundreds of those forms. So you really need to set yourself apart from the rest of the market. So if you can do a covering letter, you know, I'm not suggesting 20 pages long, but two, three, four, five pages long, just explaining how you're different, what onboarding process have you got, what risk management procedures you've got in place, what referral points you've got. We spoke to a firm last week where when when a new starter comes on, regardless of expertise, regardless of how long they've been in the market, they have a hundred percent file referral rate for the first month until they're satisfied that that the work is up to that firm standard. And that's a great thing to put into your covering letter because it shows that you've got that rigour around new starters coming on on board. Equally, don't send through every single office management system that you've got. You know, an underwriter, unfortunately, has to read through everything that that you send to them. So if you send them through every file and it's literally hundreds of pages, that's going to be a waste of their time and they'll probably put it to the to the lower down in their pile than that than they have. But it's really about you know making sure that your proposal form, your covering letter is making your different point to the rest of the market.

SPEAKER_01 14:53

I think it's quite interesting though, because a broker can make a real difference, particularly if they know what they're looking for. So part of our job is to check the proposal form. It comes in, and there's certain things that you're looking for, or that you get an uncomfortable feeling about that you will then zone in and say to that client, actually, we need a bit more information about financials, or we need a bit more information about the expertise that you've got around BSA or whatever it is, but that is individual to that firm, and it enables them to tailor that letter or that overview that they're doing to insurers, probably to three or four things that are absolutely key for their firm, but it's making sure you're building the time because I I don't know how Phil found it, but in September, when we were doing the last big renewal season, it seemed that sometimes people were a bit more prepared to submit a proposal form a bit later than they might have done when market conditions were less favourable. And you are waiting for a decision from human people who are going to sit there and read your submission. And it's making sure that you give them adequate time to do that and resolve any questions, because that that's all setting you up to get the very best outcome for your firm.

SPEAKER_02 16:09

We run the British Conveyancing awards, and I sometimes think, uh, without being too flippant, that writing your submission for an awards program probably isn't too dissimilar to writing your proposal form for your insurer. And I suspect that there are a lot of firms out there who simply don't showcase everything that they do as well as they they could do uh because they think that perhaps it's not relevant or they forget that they're doing it because it's so you know, it's so ingrained into the organization. Have you got any sort of ideas or any best practice around how firms can really drill into how they differentiate themselves, as you say, Phil, and how they can present that to the insurer?

SPEAKER_01 16:58

It's difficult. I think there's a few areas. I mean, a lot of the firms that we see have been enjoying growth for the last, you know, number of years, and some of that will be partly down to things like the SDLT holidays that were last year, where they might have taken on a bit more work than they would normally do. But sometimes it's down to fee increases. So that's a really important key bit of information to get across to insurers that actually the numbers of files might not have increased. Technology's probably moved on enormously. How are they how are they using that tech? And sort of the file supervision and oversight. So there probably are areas where they are better able to showcase themselves. And I think sometimes it can be difficult because this is advice that as brokers, we've all been saying put overviews in for a number of years, and there's sometimes a tendency to we wrote an overview five years ago and we just keep bolting bits on. And sometimes actually it needs a good edit to say, actually, we don't need those bits anymore. Perhaps instead of talking about COVID and and remote workers, we'll bring it back and talk about cyber risks and how we're managing cyber training. So it's trying to get that really frank advice about what can probably be lost along the way to make sure that what you're sending is is as effective as it can be.

SPEAKER_03 18:23

I I I guess the other thing to to note is uh most insurers look at gross fees that a firm delivers. I think if you can if you can break that down to looking at how much you charge per file, um how many files you're actually undertaking, how many files that is per fee. Because what we have noticed probably in the last six to twelve months is is a move from firms to actually reduce the workload that they're they're putting on fee earners, which is obviously a positive for the fee earner and the firm, but also positive for the insurer. Unless you tell the insurer that, then they're not going to be aware of that. So it's just drawing out things like that where you've made a positive change to the firm just to just to make that make that point to the end writing.

SPEAKER_01 19:04

And I think it's about being very frank as well, where there's where something has you know departed from the ideal. You know, if there is a big claim, if there's something in there that that needs addressing, it's far better to tackle it head on than to sort of send it in and wait for insurers to draw out the questions. I think particularly at those quarter ends when insurers are busy, it's a bit like the situation Phil was describing with sending your entire policies and procedures. You're trying to absolutely stand out, show that you are aware of the risks that your firm is presenting, and make it really easy for insurers to see what you've done, what you might have changed, and how you recognise those risks and addressing them.

SPEAKER_02 19:50

You kind of touched on technology in the course of the discussion so far. And uh, I mean, I know, for example, for the technology providers, some sort of ringing endorsement from an insurer is is is gold dust, isn't it? Because of course it it if you use our product or our system, then your insurer is going to look favourably on you. But I mean, it that genuinely kind of does feel as though it's the case from what you're saying, that technology, not to pick out anything specifically, but technology being used in organizations to mitigate risk is a no-brainer as far as the insurers are concerned.

SPEAKER_03 20:27

Yeah, I think so. And I think where you've got we've seen a lot in the last two to three years of specialist conveyancing firms either buying off-the-shelf specialist uh case management systems or invariably building them themselves. And what it allows them to do is have touch points where certain cases have to be referred or or triggers occur, or or they can adapt if if they see notifications or issues in certain areas, they can tweak the system to reduce that risk going forward. So I think that's a really positive piece on the on the general case management piece. We've then got AI now that's coming in, and different firms are using that differently, whether it's just to check a lease or highlight various things on a lease that the the case handler then then reviews and and takes notice of. I think that will evolve over the next, I would say, three to five years. It's probably going to be one to three, isn't it? I think the way I AI is moving at the moment is it's so it's so quick. But I think it's just firms being aware of that and and not necessarily jumping all in with one provider, but just assessing them and doing trials and to see how it works for them, how it works with their case management system and their staff to make sure it's doing what it should do. Just because you've got a case management system doesn't mean it's going to stop any claims occurring. If somebody's not following that system and it's finding workarounds around it, that case management system can't stop it. So IT itself isn't the answer. I think it's it's firms and and fee using that that uh IT. in a proper manner that that really reduces risk.

SPEAKER_02 22:03

It's very difficult to have any conversation about anything at the moment without it, of course. But it it it presents a really interesting kind of dynamic, I think, to insurers because to your point, Phil, used well, I think it has, you know, real augmentation ability. But of course, used badly is actually quite dangerous. And I don't think one of the things I'd fully appreciated, rightly or wrongly, is that there's good AI, of course, and then there's bad AI in the same way that there's good technology and bad technology. I mean what are the attitudes of insurers towards AI at at the moment? And I guess by extension, I think my question probably is to what extent do firms need to be evidencing the sort of due diligence that they're doing on it for the purposes of insurance?

SPEAKER_01 22:54

I think they're both really valid questions. I think there's there is due diligence to to be done. And it does need to be backed up by policies and procedures. And it's also training the staff to use it effectively to make sure it they're getting the best out of it from an efficiency point of view and it's producing the result that you're looking for. Because I was having the conversation with somebody earlier in the week and the trouble is if you ask the wrong prompt or the wrong question of your AI tool you're not going to get the right answer. And the piece that a lot of clients are telling me that they're doing at the moment is they put the prompts in, they get the answer back and then it's making sure that somebody with sufficient knowledge then checks and actually if it's not quite right when they then go back to the question they can often see why the answer hasn't been quite right. But that all implies a level of technical knowledge and an understanding before you deploy these these tools and with Phil I think a lot of them will come in but I think at the moment it's very important that if firms are looking at due diligence that they think properly about how to use it and make sure that the AI is staying within a closed environment that tends to be one of the first questions we're asking.

SPEAKER_02 24:14

I think it makes your job much harder because it it's almost an unknown quantity.

SPEAKER_01 24:21

Yeah I think I think it is a genuine difficulty and sometimes you know how however much we we research tools and we look into them we don't always know the applications and equally insurers don't know the applications. So we need that guidance from from the firms themselves as specialists to explain why what it is this tool's going to do, why they're using it, what they're using it for, so that they can walk insurers through that journey so that insurers can see whether or not they do believe there's going to be a genuine benefit or if it is a a concern to them.

SPEAKER_02 24:56

And of course insurers are probably I say of course I'm not sure but they're going to hedge their bets at this stage. So the premiums aren't going to come down as a result of using AI until it's been proven to be more effective. I mean I'm creating a narrative here but is that is that right or is do you do you actually see that insurers are taking a very positive view of of these developments?

SPEAKER_03 25:16

I I think it's too early to say I mean there's so few AI tools that everybody's using at the moment for it to have have an impact and I think it's interesting because we Marian and I had a client meeting earlier this week with an insurer actually as well they were in the meeting as well and they were talking about one particular function and it was reading leases and and the they they put it through both the FINA read the lease but also AI read the lease and the AI would pull out certain aspects. So it's sort of a almost using it as a backstop or a failsafe and I think that's to your point David that that's reducing the risk but from the underwriter perspective you're not taking the human out of it. I think that at the moment they're the tools that work really well where the the fear and the AI is working together as opposed to the AI taking away a role from the fiat where we'll be in three to five years time I I I couldn't say but I I think at the moment it it's having those conversations about what the AI is doing, what its limitation is and what controls the firm has over that AI and and hopefully we we will see a reduction in risk which hopefully we'll see a reduction in premium in in in in the coming years. But we're not see we're not seeing that at the moment David I'll be frank.

SPEAKER_01 26:30

It's difficult though because in insurance is based on numbers and stats and past histories of claims and that that information just isn't going to be available until we're a few years down the line.

SPEAKER_02 26:43

There's a wry smile on your face when you said reduction in premiums Phil but uh I won't hold you to it don't worry we're coming towards the end of the time we have for the discussion and I just wanted to end you know it's been a a chunk of time we've spent on AI but just to finish on other emerging risks that you're seeing as brokers that you know you understand that insurers are concerned about. We were at the Miller insurance conference earlier this year in January cryptocurrency came up I you know I know historically that's been don't touch that with a barge pole you know message from from insurers what what other emerging risks are there that insurers are concerned about that firms need to be thinking about we're still very mindful of crypto risks even if it's a realized asset that's in a bank account just for the the checks as much as anything that needs to take place around that and the worry is with those if they found mid-transaction they're more tricky to deal with.

SPEAKER_01 27:41

Cyber risk is still a concern you know we're we're regularly taking calls from people that are needing to consult a cyber specialist we generally talk to people about having a cyber insurance policy so they've got access to that 24 hour seven day a week helpline as much as anything so they've got that crisis management support almost that's in place when something does happen. Those are two that are definitely on my list.

SPEAKER_03 28:07

I think the other point is there's just so much change going on in this area at the moment you know there's there are two government consultations at the back end of last year we've got the the movement from AML from the regulators to the FCA we've now got the tax advisor status. I think there's just certain common hold that you touched on David you know I think there's so much going on that I think firms to keep up with with all that as well as doing their day job I think that's that's what firms really need to be you know concentrated on and there's so many seminars that people can go on and you know you could spend your entire life doing that but I think if you try to do sort of once a week once a fortnight just to keep on top of it to keep keep abreast of these things I think that'll put your firm in a in a really good position going forward.

SPEAKER_02 28:52

I often think to myself that trying to do a a topic like insurance which is obviously huge in the course of a half an hour podcast is really tricky. So I'm hope that listeners have taken something away from today. It's been great to have you both on to share your insight I really appreciate you joining the podcast today. Thanks very much indeed the Today's Conveyancer podcast is available on your preferred podcast provider. It's also available on today'sconveyancer.co.uk My thanks to Marianne and to Phil. Thank you as ever for listening and we'll see you again soon.

SPEAKER_00 29:28

You're listening to the Today's Conveyancer podcast the leading source of information for residential property lawyers in England and Wales. Don't forget to subscribe and sign up to our free newsletter at today'sconveyancer.co.uk you can also follow us on LinkedIn and Twitter