In-depth – ATE insurance: A bright future for brokers and ATE

9 February 2021

Harbour Underwriting features in an in-depth article in Insurance Age about how After the Event insurance can help brokers stand out from the crowd

The article in Insurance Age says the ATE market has come of age and is set to play a prominent role in litigation risk management: “ATE has emerged into the world of commercial litigation and more and more are waking up to the opportunities it presents in an increasingly litigious society.” 

The piece explains that ATE insurance evolved out of the introduction of ‘no win, no fee’ arrangements in civil cases and was initially used in personal injury cases. But this market vanished almost overnight following the introduction of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012, which abolished the recovery of ATE premiums. 

Rocco Pirozzolo, underwriting director at Harbour Underwriting, says that following LAPSO the ATE market “started to emerge out of bodily injury cases into more run of the mill commercial disputes”.

He explains: “An insolvency practitioner could be appointed, but there was no money in the liquidation, so lawyers were forced to work under no win, no fee arrangements and the ATE insurance was contingent, it wasn’t payable until the end. It was the genie coming out of the bottle – lawyers realised they had to find a new solution for institutional clients.”

The article says ATE is now a specialist field that requires a significant amount of legal acumen to exploit fully. “But while it is very legalistic in its language and usage, there are still opportunities for insurance brokers to get involved.”

It goes on: “For those willing to make the effort to explore this market, the opportunities are there.”

One regional broker mentioned as making a foray into the market is George Stubbs Insurance Brokers, with group managing director George Stubbs quoted as saying “we want to become the go-to broker for this”. 

The article says:

“[George Stubbs] says that while he is expecting a bit of a learning curve, they are starting off in the niche area of insolvency and expect to expand and grow from there by targeting specialist legal firms. The first step is to partner with a global legal firm with a local presence and specialist MGA Harbour Underwriting bringing the lawyer’s clients to the insurance expertise of Harbour and its ATE products.”

Stubbs says: “If you get the lawyers switched on to it, they will probably have a minimum of 10 cases in a year, so if you develop relationships with 10 lawyers, you could have 100 cases a year.”

The article concludes: 

“Today’s ATE market is niche, sophisticated, time-intensive but, crucially, with the right expertise and approach, could be very lucrative with commissions ranging from anywhere between 10% to 30% on premiums that can run into millions of pounds. But to get access to that possibility, investment and a long-term approach will be required.”

You can read the full article here.

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