Underwriters under pressure

Article Abstract:

Soft market conditions have intensified the competition among insurance companies in the UK. Insurers are cutting their rates to attract clients but in doing so, they also reduce their profits. Given this situation, underwriters know that they would have to raise their premiums but no one is willing to be the first to do so for fear of losing their market share. Instead of raising rates, insurers are trying to keep the number of claims down by encouraging their clients to take every precaution to lessen the risk and the expense of a claim. Nevertheless, chartered accountants must be ready for the impending increase in insurance premiums. Since Institute members are required to have professional indemnity insurance, it would be a prudent move for them to evaluate different policies available in the market before they buy one.

Insurance agents, brokers, & service, Prices and rates, Insurance industry

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Accountants in a risky business

Article Abstract:

Management indemnity insurance is becoming increasing necessary for many highly-placed corporate accountants. Such coverage allows accountants to insure against losses and legal costs that arise from liability claims evolving from their involvement in management positions such as corporate board memberships. Several factors that have helped to trigger the increased risk of liability arising from an accountant's professional duties include the rash of statutes under which management liability can be incurred, the rise of increasingly aggressive shareholder attitudes, and increased merger and acquisition activity and its attendant risks.

Insurance carriers, not elsewhere classified, Indemnity against liability, Liability indemnity

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Compulsory professional indemnity insurance

Article Abstract:

The Institute of Chartered Accountants in England and Wales proposes to make professional indemnity insurance mandatory for all accountants. Mandatory insurance would be introduced in two phases; all firms authorized by the Institute to conduct investment business would be required to have insurance by January 1989, and all members in public practice would be required to have insurance by January 1990. Members would be free to choose their own insurer, and the Institute is in the process of developing an Approved Insurers Scheme. The level of coverage required and the wording of insurance policies are described.

Standards, Accounting and auditing, Institute of Chartered Accountants in England and Wales

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