PI premium hikes hurt planners
Financial planners are experiencing professional indemnity (PI) premium rises of up to 40%, according to the Financial Planning Association (FPA).
Deputy CEO Deen Sanders told insuranceNEWS.com.au in addition to reports of substantial PI increases, members are also noting higher deductibles and new exclusions creeping in around particular types of products and strategies.
“PI firms will often put in a blanket exclusion for something that happens in the marketplace like margin lending, agribusiness or management investment schemes,” he said.
“Things like the Storm Financial collapse is an isolated incident, and in that process the PI liability is in question, so there might not even be a claim at all. Nonetheless, every financial planner has suffered as a consequence.”
Mr Sanders says the FPA’s own PI facility, which helps members get the best PI deal possible, has been advised by underwriters that a pricing increase is imminent as they begin negotiations with reinsurers.
Deputy CEO Deen Sanders told insuranceNEWS.com.au in addition to reports of substantial PI increases, members are also noting higher deductibles and new exclusions creeping in around particular types of products and strategies.
“PI firms will often put in a blanket exclusion for something that happens in the marketplace like margin lending, agribusiness or management investment schemes,” he said.
“Things like the Storm Financial collapse is an isolated incident, and in that process the PI liability is in question, so there might not even be a claim at all. Nonetheless, every financial planner has suffered as a consequence.”
Mr Sanders says the FPA’s own PI facility, which helps members get the best PI deal possible, has been advised by underwriters that a pricing increase is imminent as they begin negotiations with reinsurers.