Why PI insurance premiums are rising
Andrew Ford, head of financial and professional risks at Crombie Lockwood, said external global factors and the introduction of the FSLAA regime had caused the issue for brokers.
Advisers report professional indemnity costs of $1,000 to $1,500 under a group FAP, and as high as $4,500 for those with their own FAP licence.
Ford said: "The whole professional indemnity landscape has been hardening for the past two to three years, driven by poor loss ratios. Lloyd's [of London] syndicators have stopped underwriting over the past 18 months because they don't believe they can return their books to profit. There has been historic under-pricing and increased claims activity."
"The key areas of professional indemnity where premiums have increased are anything in the financial adviser space, including mortgage brokers, and anything construction-related. Those two areas have been hit with 20-40% increases year on year, for the past two years."
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
