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Innocent majority take blame for the bad risks

Interesting though it was to read the recent article, Network dilemma, it was equally disheartening to hear so much evidence of this latest professional indemnity insurance pressure on IFAs to “jump on board and let the network take care of all your problems”.

Indeed, they can, and do so, but it does seem that this is fast moving us back to the bad old days and the perception that not only was a network a good place to learn the skills of independence but also a convenient place to”lie low” for a while.

Of course, the simple mathematics of joining a network are no different from any other insurance – Share the burden of your risk with others.

The one serious flaw in this idea is the question of whom you share business risks with. And the further question of how much trust you can place in the skills and motives of the central agency dealing with those risks.

The break-even point comes when you realise that you are unfairly subsidising not only the PI sins and misdemeanours of “the few” but that there are also other costs, less obvious, besides.

We all know that the ever spiralling costs of motor insurance result primarily from the uninsurable minority, who do not bother to take out insurance. Or, put another way, with those who are such bad risks that they ought not to be allowed out on the road at all.

The bottom line is that, eventually as ever, the innocent majority end up bearing an unfair portion of the expense, and perhaps even reputation, for such blanket facilities.

Your own columns bear frequent testimony to widespread anger among appointed representatives at a number of such “service” providers whose greatest efficiency seems to be in recouping their costs in the PI field.

One presumes that these calculations and those for similar services are mathematically fair but doubt will ever remain over their fairness to the majority.

E John Hamp

Support Services Group,

Corfe Mullen,Dorset


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