Skip to content

Brought to you by:
Email Print

Day warns of PI challenges amid change

Social and regulatory changes are having a significant effect on professional indemnity demand, while the emergence of robo-advice will offer new challenges, Suncorp Insurance CEO Anthony Day says.

In the past professional indemnity insurance was sold via intermediaries to “traditional professions” such as law, medicine and engineering.

But increased government intervention has required cover to be taken out in other areas, and there has been a demand shift towards SME and contractor professionals and away from employed and corporates, Mr Day told the Australian Professional Indemnity Group conference last week.

Technological changes include the availability of web-based quote and bind systems, with little to no underwriting intervention, offshoring of underwriting and claims functions, and other impacts.

“We are seeing new professions and exposures that hadn’t existed before, including activities once seen as non-professional moving into the professional sphere,” Mr Day said.

“This means new risks for more customers and new opportunities for our industry to help manage those risks – if we can take advantage of them.”

Automation raises the prospect that professional indemnity cover will be required for advice provided by robots.

“If so, we’d need to figure out how we would handle claims against robo-advice,” Mr Day said.

“We’d need to have agreed on how to assess whether advice provided by artificial intelligence was negligent.”

Mr Day, who is also President of the Insurance Council of Australia, notes a loss of faith in institutions that underpin public life, which is also affecting financial services.

“We find that people increasingly appear to trust the advice of ‘people like them’ – such as via customer-rated reviews and social media posts. To reclaim trust, we need to de-clutter and simplify our communication, ensure our products provide value and provide customers with the advice and tools whenever they want it, so they are empowered to make good decisions.”

Brought to you by:
Insurance Jobs Brought to you by: