There have been many claims that the Professional Indemnity (PI) insurance market is the biggest threat to IFA businesses in 2020. There is a noticeable shortage of insurers and capacity in the market; also, rather than offering fully compliant cover, many of the remaining insurers are adding restrictions and large excesses and an increase in premium to go with it. Firms with restrictive cover have had no choice other than to increase capital adequacy as per the FCA handbook. Those firms who have been involved with DBTs are struggling the most as many are finding they are not being offered renewal terms at all.
Typically an IFA would have been paying between 1-1.5% of their turnover in PI premium; now I have seen renewal terms soar to 4-5% with several restrictions. I hope that this guide can assist you in obtaining the best possible cover at the most competitive price.
1. Begin your renewal process early
Due to the shift in the market we aim to invite all IFA renewals at least 8 weeks before the renewal date; if the renewal is left to the last minute, you may not get the best available price. Starting early will give you and your broker the time it takes to work on your submission and negotiate the best policy for you.
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