DB Transfers and Professional Indemnity Insurance
Has your firm been active in advising on DB transfers since Pension Freedoms? If so, you would probably be aware of the implications this has had on your Professional Indemnity Insurance (PII) renewal, but there are a number of very important steps you should take to minimise any negative outcomes in your forthcoming renewal.
What has changed in your firm’s profile or your PI Insurer since your last renewal? In the build up to your renewal you should get in touch with your broker and ask what developments have happened in the market over the last year. If your broker is a specialist IFA PII broker they should be in continuous dialogue with insurers in the market and should be aware of any red flags or changes in coverage offered for similar firms. These may include any increased excesses, exclusions or restrictions.
Assess the information that you need to provide because in order to maximise your chances of a successful renewal you need to ensure that insurance underwriters have a clear idea of how you advise on DB transfers. Together with the proposal form and DB transfer questionnaire, make sure that you provide supporting information such as documented processes, suitability reports and external compliance input as well as information on how many pension transfer specialists are in the firm.
Access to the insurance market
Which brokers are you working with and which insurers are assessing your firm? The pool of insurers is very limited and there are a number of non-specialised brokers active in the market. One of the dominating features of a firm receiving less than satisfactory terms is when a number of brokers approach the same insurers with varying levels of information. This works to your detriment and we see evidence of this on a daily basis. The broker you work with should be specialised and have direct access to the IFA PII market, work within set timescales and be clear as to which insurers they are approaching and why. Therefore, you should make sure that there is no crossover.
Changes in coverage
Continuity is important for maintaining coverage but this is not always possible due to changing underwriter appetite or withdrawals from the market. If you are changing your insurer, then make sure that you are fully aware of any changes in coverage and implications of any increased excesses.
Once you have gone through the renewal process, assess what you can do during the year to keep insurance underwriters reassured for your next renewal. Has anything flagged up during renewals that you can limit or review during the year? This shows that you are proactive and aware of the concerns that underwriters have. It would be good to enquire as to whether there is any opportunity to meet or arrange a call with your underwriter in the run up to your renewal.
These steps will assist you in achieving a positive outcome and provide you with a more structured renewal process, protecting your business and improving your levels of interaction with your insurers.
Questions for your broker
In summary, these are the questions you should be asking your broker when renewing your PI Insurance:
- Proactive: What is the current appetite in the IFA PI market for a firm of my profile?
- Information: What supplementary information should I provide?
- Access to the insurance market: What insurers do you deal with and how do you access them? Which insurers are suitable for my firm and why? Do you understand my business?
- Changes in coverage: You have provided me with a quotation and can you explain what changes, if any are there from our current cover?
- Be proactive: What can I do to improve my risk going forward for insurers? Is there the opportunity to arrange a conference call or meeting with my insurer?
How can we help?
Protean Risk is a specialist financial services insurance broker with a dedicated IFA Team. We have extensive direct access to insurers in the market and are focused on providing tailored solutions to our clients. We are an independent Lloyd's registered broker and we have a number of active relationships with compliance providers, law firms, the Financial Conduct Authority and other supporting bodies. We focus on our expertise and high levels of service as you can see from our recent client survey results here.
If you would like to speak with us about the IFA PII market, your firm, our services or anything else, then visit our IFA page and get in touch with a member of our team