Tenet halves PI excess for low-risk investments
Tenet has cut the cost of professional indemnity insurance excess for claims involving risk-rated multi-asset funds, the network announced today (31 July).
The 50 per cent discount for IFAs who adopt lower-risk investment strategies could be the first of many cuts to the cost of paying for excess, Tenet group distribution and development director Keith Richards said.
He said: “As with any insurance product, less risk should be reflected in preferential terms. In this case, it has enabled us to negotiate a significant cut in the excess and we are reviewing further opportunities to reduce excesses for other categories.”
The discount comes as IFAs are growing increasingly concerned about the soaring cost of PI insurance premiums, the exit of some insurers from the market, and a rising number of claims over the past 12 months.
Tenet’s excess reduction, which will benefit all network clients, was enabled by the company’s Guernsey-based subsidiary, Paragon Insurance. Tenet is also looking to secure similar arrangements for directly authorised firms.
Mr Richards said: “This is a flip side to what many people see as a hardening PII market, where the increasing use of excesses and exclusions has become the norm.
“In contrast, we believe a more balanced approach should be implemented and better terms offered where appropriate, especially where advisers adopt lower-risk investment strategies. Risk-rated multi-managers are a perfect example.
“If certain products have a negative effect on cover, it stands to reason that other products will have a positive effect.”