Professional indemnity insurance underwriter Chubb has pulled out of the IFA market, saying it is no longer profitable.
The firm announced last week that it was withdrawing from the market with immediate effect. It also pulled its cover for surveyors and valuers.
The firm says it will honour any agreements already in place but refuses to disclose how many advisers it currently provides cover for.
A spokesman says: “Chubb is withdrawing with immediate effect from the surveyors and valuers and IFA professional indemnity lines of business offered through its Lloyd’s Syndicate Club, Chubb 1882. From a profitability standpoint, Chubb has concluded that it is no longer viable to continue these lines of business.
“Chubb will honour any terms currently on offer to brokers on these lines of business. Chubb will no longer accept new business submissions nor will it renew existing business on these lines.”
IFA Solutions managing director Jamie Newell says: “I would estimate Chubb represented 15 or 16 per cent of the PII market for advisers, so this move is significant. I think there will be a few more pulling out of the market before the end of the year.”
In February, PI brokers warned IFAs could see PII costs soar due to the departure of major insurers from the IFA market and increasing claims following high-profile defaults such as Keydata, Lifemark and Arch cru.
In July, PI insurer Beazley pulled out of the IFA market due to increasing claim numbers and QBE followed in December, saying the market was no longer profitable.
Carbon Financial managing director Gordon Wilson says: “Advisers are finding their premiums are higher than anticipated and they have to accept that. The best way to combat it is to manage your business well and keep risks to a minimum, therefore keeping professional indemnity cover as low as possible.”