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News & opinion

9 JUL 2021

RICS review of Professional Indemnity Insurance requirements in the UK

I am delighted to have been appointed as Chair of RICS’ PII Working Group, which will advise and support the Standards and Regulation Board’s (SRB) review of RICS professional indemnity insurance (PII) requirements in the UK.

This review has been initiated due to the extremely challenging insurance market that firms are finding themselves in. Chartered Surveying firms are being affected by a reduction in the supply of PII, significant increases in premiums and increased use of exclusions, particularly around exposures to fire safety. I believe that the lack of adequate, appropriate, and affordable PII availability is one of the biggest issues facing firms of Chartered Surveyors today.

I know how challenging the insurance market has been for many firms over the last two years, and I recognise the good work RICS has done to date. However, I believe there is a need to undertake a more fundamental review of our insurance arrangements, which I hope will lead to further improvements in the availability of adequate, appropriate and affordable PII.

Andrew Gooding

The lack of adequate, appropriate, and affordable PII availability is one of the biggest issues facing firms of Chartered Surveyors today... RICS will work with the insurance industry, regulated firms and other stakeholders to develop an adequate, appropriate and sustainable PII market in the UK

During the review RICS will work with the insurance industry, regulated firms and other stakeholders to develop an adequate, appropriate and sustainable PII market in the UK. The review will focus on the following areas:

  • Reviewing RICS PII requirements and how RICS can best support the development of adequate, appropriate and sustainable PII market for RICS regulated firms;
  • Identifying additional guidance and support that RICS can provide for RICS regulated firms obtaining adequate and appropriate indemnity;
  • Understanding what information consumers and clients require to ensure transparency around RICS regulated firms’ indemnification arrangements; and
  • Reviewing how RICS collects and uses data to predict emerging trends in the PII market, as well as better assess and articulate the risk profile of the profession.

To support this review, RICS is appointing an independent insurance expert to gather evidence and make recommendations on potential options to improve our insurance market. This information will be used to consult on proposals to our insurance market in the future.

Recognising the importance of this topic across different sized firms and areas of practice, a diverse working group has been appointed to bring experience and challenge to the review from a variety of different perspectives.

This an exciting and important working group that I look forward to being involved in and would urge all members to get involved during the engagement and consultation phases of the review.

  • Andrew Gooding FRICS

Andrew is a Partner at Knight Frank LLP with responsibility for valuation quality assurance and risk management issues. He has extensive professional experience of property valuation, particularly in the residential development and investment sector. In addition to the UK, Andrew has considerable experience of valuation practice across Europe and internationally. Andrew’s role also includes maintaining the firm’s business relationships with lending institutions.

Andrew is the current Chairman of the RICS’ Market Liaison Group with professional indemnity insurers and a member of the Commercial Cross Industry Valuation Forum, addressing valuation issues in the secured lending sector. Andrew has also recently participated in RICS’ working group which has reviewed existing guidance on risk, liability and insurance.

Update - 13 Dec 2021

The expert advisory group has met several times to discuss the issues impacting the PII market for surveyors. To support the group, RICS appointed Marcus Elwes, an independent insurance expert, to collect evidence of market conditions and present possible options to help develop an adequate, appropriate, and sustainable PII market.

Using feedback from the group, a series of recommendations were made to the RICS Standards and Regulation Board (SRB) in December 2021. These include a series of short- and medium-term actions which RICS can undertake to alleviate some of the pressure on the market and support firms in obtaining PII. The short-term recommendations are steps that RICS can begin immediately.

There is no single solution that will completely solve the challenges regulated firms are facing in obtaining PII, but it is hoped that these actions will contribute to an improved PII market for surveyors. The medium-term options constitute more fundamental changes we could make to our PII framework. These will require further exploration and viability assessments and so will not be implemented as quickly.

The SRB have received these proposals. We will be publishing a call for views in early 2022, as part of which we will ask for feedback from the profession, the insurance market, and other key stakeholders.