Exposure to risks created by advising on pension transfers is the second most common reason professional indemnity insurance will not offer renewals.
A survey of six of the biggest PI firms serving the adviser market conducted by Protean Risk reveals the reasons insurers will not offer renewals to existing clients.
This includes issues such as poor claims records, change of business models, and non-disclosure of material information.
The report says: “It is clear from the results that insurers remain concerned about claims frequency, with more than two thirds of those surveyed expecting claim notifications to increase in the next 12 months.
“When considering the top three concerns, perhaps unsurprisingly, the majority of respondents focused on pension transfers (especially defined benefit), tax schemes, and unregulated collective investment schemes with insistent clients emerging as a key underwriting factor in each of these areas.”
Insistent client pension transfers remain a contentious issue for advisers.
The FCA says it will not issue further guidance, but advisers and the Personal Finance Society say the regulator is failing to recognise the role of PI insurers.
Protean Rick chief executive Nathan Sewell says: “We wanted to help IFAs understand how they can better protect their business from professional indemnity claims, make more informed risk management investment decisions and secure the most competitive insurance premiums.”