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DBS fees to rise as PI premium rockets by 52%

DBS members are facing a fee hike, with the network hit by a 52 per cent increase on its professional indemnity insurance.

The firm cannot yet confirm the extent of the rise. It will hit members in the form of higher monthly “rechargeable fees” from September as DBS joins the same underwriter as the other four Misys networks. DBS regulations stipulate that members must subscribe to the insurance policy taken out by the network.

Although PI premiums for most professions have fallen for the past 12 years, IFAs have suffered increases due to regulatory reviews, pension misselling and problems with endowments and split-capital trusts, says PI expert Dickson Manchester Underwriters.

Dickson Manchester associate marketing director Andrew Macpherson says: “IFAs have suffered a double whammy. They were paying higher PI premiums in the first place and now the fall in excess capacity in the PI insurance market as well as low interest rates, falling stockmarkets and the impact of September 11 on the reinsurance market have forced premiums up further.

“Dickson Manchester are unable to underwrite IFAs at all at the moment and I can&#39t see any way we can in the near future. There are gloomy times ahead.”

DBS member Halton Insurance Services director Mike Fry says: “Nothing ever goes down with DBS. I realise that PI premiums are going up because of the market but

52 per cent is a lot. Charges keep going up and the service keeps going down but because of issues like CP121, people are not jumping ship because they do not know the full extent of what lies ahead. It&#39s a case of better the devil you know than the devil you don&#39t.”

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