Warning on tighter PI availability

Underwriters are likely to be steering a wider berth of professional indemnity (PI) insurance in the wake of the Royal Commission into Banking, Superannuation and Financial Services as well as other factors, according to Honan Insurance Group ANZ chief executive, Andrew Fluitsma.

Commenting on Honan’s recently-released December 2018 Quarterly Market Update, Fluitsma said the firm was already witnessing global underwriting markets in Lloyds ceasing to write certain classes of business such as PI and marine and expected this to continue.

He said Honan expected a continuation of upward pricing pressures throughout 2019, bringing with it another challenging buying year for businesses with insurer risk selection and appetite continuing to drive underwriting behavior leading a growing rating/pricing gulf between low hazard and less desirable occupancies.

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“Underwriting profitability remains the key performance metric in the medium term as insurers continue to focus on good performing and risk managed businesses,” he said.

Fluitsma said that throughout 2018, insurers had found themselves in a challenging position, whereby previous strategies to build market share through top line premium growth had been replaced with the need to bolster bottom line profitability. 

He said that with this approach came a willingness to walk away from business should the underwriting re-calibration not yield acceptable levels of profitability

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Just be a money coach, life coach or whatever you want to call yourself other than Financial Adviser then you dont need Professional Indemnity insurance and you can recommend whatever you want.

Everyone else does it, Union bosses, talk show hosts, real estate agents, mortgage brokers, accountants, accounts clerks in businesses, hairdresses, Barry down the pub. Financial Advisers are the only suckers paying all these fees/PI and wasting all this time on compliance. Once you go to fee for service charged directly from client's bank accounts (mandated by government) why would you bother with all these extra costs/paperwork?

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