Regulation  

The real story behind PI premium hikes

At present, a number of potential new entrants to providing insurance solutions to the profession are concerned about the volatility of this class of business.

Long-term practitioners will not need reminding of previous issues with the original pension review: Splits and Scarps, Arch Cru, Keydata, Harlequin, pension ETVs and UCIS. 

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Insurers cite and draw comparisons between what we are facing today and the difficult years following the global financial crisis, and the claims that emanated from this, significantly increasing volumes and values through 2010, 2011 and 2012. 

The class has generally been quite profitable for insurers since then.    

As an insurance broker, and specialists on behalf of the profession, we take our role very seriously in trying to persuade insurers to remain in the market and also look to provide statistics and commentary to either persuade new insurers or previous insurers to re-enter the market. 

We strongly believe that insurers’ concerns around the profession are, in some instances, overstated. For the considerable majority, there is a keen sense of doing the right thing for their clients in a suitably compliant fashion. 

So what can you do to help?

  • Proposal forms are long and complex – but please pay attention to the detail and add supplementary information. You are using this to sell yourself to the insurance underwriter. While people continue to work remotely and with huge workloads, a badly completed form, or one that is difficult to read, will potentially go to the bottom of the pile.
  • If you have been advising on DB pension transfers, supply as much information as possible to support the resilience of your processes. As we have seen from the various FCA reviews, the number of cases on which you advised and the ratio of numbers transferred from the whole population are important.We all know that a number of companies and their advisers turned away many potential transferees who clearly would have been unsuitable for a transfer – anything about these volumes is useful. As of course are those that transferred and remain with you as active clients receiving ongoing advice.
  • Discuss the timing of your submission with your broker. Get information together in plenty of time (at least six weeks in advance) and leave time in case there are additional questions.

All insurers, whatever the profession of their client, are interested in how your business has been impacted by the pandemic. Include a few paragraphs around how you have been working, how compliance and regulatory responsibilities have been catered for, how your income has been impacted and your expectations for the future.

This is all valuable information that can assist your broker.

Steve Ray is divisional director at Howden Insurance Brokers