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Why are IFA’s finding Professional Indemnity Insurance more challenging to obtain at reasonable terms?

 

…alternatively…

Why is getting suitable PII such a messy business?

 

There is no doubt that arranging suitable and consistent Professional Indemnity Insurance (PII) cover has become a bit of a roller-coaster ride for IFAs. One minute there appears to be a plethora of insurers willing to quote resulting in a general reduction in premiums - the next, some firms are finding themselves unable to get cover, even on any terms. These might be the extremes, but there is a definite and concerning trend in the PII market for IFAs. In our reckoning, there are now no more than half a dozen viable insurers in this space and, added to this, we would conclude form our new clients’ feedback that the typical level of expertise and service is “patchy” to say the least. 

The why? 

What are the influencing factors that have fostered this current climate? 

  • Challenging claims environment for insurers.
  • Too many insurers charging unsustainably low premiums.
  • Perceived tougher regulatory environment by insurers.
  • Lack of understanding in brokers and shortage of new ideas.
  • Too much “one size fits all” broking.

 

What can IFAs do to improve their situation? 

  • Provide good information at renewal.
  • Invest in systems and compliance which can be demonstrated to insurers.
  • Use a specialist broker - the market is tougher, so IFAs need a broker with specialist knowledge and service.
  • Be flexible and continually review advice given to clients - certain areas of advice are perceived to carry far higher risk than others.
  • Aim to build longer term insurance provider relationships - whilst it is important to shop around to get the best deal, it is also important to have an element of consistency over time.

 

What does the immediate future hold? 

Our view is that market conditions will remain difficult for the foreseeable future. Insurers are determined to seek out the better risks and compete harder on those. This is bringing about a polarisation of the market - get put in the wrong “bucket” and you could find it very difficult to get out again!
 

What is Protean Risk doing to help? 

We couldn’t end this briefing without some kind of plug for Protean! In essence we are utilising over two decades of experience to deliver a high standard of professional advice and client service to IFAs. 

We look to keep our market options wide, without being tempted to put all of our eggs into the “single-insurer scheme” basket. Furthermore, we ensure that our clients know exactly what is expected of them and do our utmost to prevent any nasty surprises at the 11th hour, when often there is little choice but to accept the renewal terms.  We’ve taken the liberty of including some recent client testimonials below and if we can be of assistance, please do get in touch. 

Best of luck,

 

Nathan Sewell

 

Angus Millen, Founding Partner, Millen Capital Partners LLP

“I was referred to Nathan Sewell by a mutual friend and he worked tirelessly, under severe time pressure given our position, to secure PI coverage for my firm after a competitor firm had let us down badly during the renewal process. Nathan’s approach was refreshingly different to other PI brokers we have worked with in the last 15 years in that he clearly took pride in placing our cover on the best terms and as similar sized firm to ours, there was clearly a much stronger alignment of interest. We felt our business was valued. I would commend Nathan and Protean Risk to any other private wealth management business.”

 

Iwan Roberts, Director, Neptune Financial Services Limited

“I would just like to say I am extremely happy with the service that we have received from Protean. We have been very fortunate to find such an efficient, knowledgeable and proactive insurance broker in a difficult marketplace and I found their up-front and honest approach refreshing when dealing with our renewal terms. We came to Protean with an issue that our terms weren’t adequate for our business and I’m delighted to say that with their support an outcome that we thought wouldn’t have been possible has been achieved.

They understood our needs and delivered on what they said they would, which is the way that we prefer to conduct business. Their expertise and relationships with the insurers is invaluable and I wouldn’t hesitate to recommend their services.  Many thanks again.”

 

Christian Elmes, Partner, Enterprise Investment Partners LLP.

‘We have recently used Protean to put in place our insurance needs for our regulated business. They quickly understood our needs, demonstrated significant experience in the sector and provided us with a much better deal than we were being offered by other insurance brokers and in a quick timeframe. We have been very pleased with the service provided by the team at Protean and would be happy to recommend them to other Financial Services firms.’ 

 

 

 

About Protean Risk: 

Protean Risk is a specialist insurance broker advising firms in the investment industry, financial services and technology sectors. Our clients range from start-ups to companies with revenues in excess of £100m and beyond. We advise clients across a full range of insurance products with a particular focus on professional and executive risks, specifically professional indemnity and directors’ and officers’ liability insurance.

 

Protean Investments Risks Limited is Authorised and Regulated by the Financial Conduct Authority. Firm Reference 479839.

 

 

                          

 

                        Nathan Sewell
                  CEO, Protean Risk

                   nathansewell@proteanrisk.com

 

                   Protean Risk

                   One Gracechurch Street

                   London

                   EC3V 0DD

         

 

 

[This is a sponsored article by Protean Risk]

Author: IFA Life Sponsored Post
Posted: Wednesday, January 14, 2015 | 11:57:39 AM


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Comments

07 February 2015 | 12:47:16 AM  Stephen Atwell wrote:
Interesting point made when Nathan mentions "building a long term relationship".

I had been with my insurer for 4 years, and felt that consistency was good, I was happy with the service and price until this year. My renewal came in on the 23rd December at a 100% increase! When questioned the reply was basically take it or leave it, thinking I would take it because I had only one working day to accept or compare. I did get a new quote £800 less the my existing brokers quote. So perhaps long term relationships aren't good.

Sorry Nathan

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