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PI brokers raise concerns over new insurer Elite

Professional indemnity insurance brokers have raised concerns about the financial strength of new PI insurer, Elite

Hoyl Underwriting Management, which offers cover underwritten by Elite Insurance, entered the financial adviser market last month with claims it can halt the trend of escalating premiums.

But PI brokers say advisers need to be aware that Elite Insurance is not rated by a recognised ratings agency, nor is it directly regulated by the FCA.

The insurer is domiciled in Gibraltar and regulated by the Financial Services Commissioner For Gibraltar. It operates in the UK through the European Economic Area passporting rules.

HUM is selling directly to advisers and not through PI brokers.

PI broker IFA Solutions managing director Jamie Newell says: “Our corporate governance only allows us to place business with insurers that hold a financial security rating from a recognised rating agency. To do otherwise would go against the duty of care we have to our clients.

“It is imperative that advisers are aware of this – without a rating you cannot know the financial strength of the firm. And while it is welcome to see a new entrant to the market, advisers should ensure they undertake appropriate due diligence.”

Howden Windsor associate director Umesh Puri says: “Our due diligence standards only allow us to work with insurers which are rated by Standard and Poor’s as A- or better.

“Firms need to satisfy themselves that their insurer will be around long-term and can meet its obligations if they make a claim, bearing in mind that claims can take several years to be settled.”

HUM director Paul Barnes says: “We are partnering with Elite Insurance because it shares our view that there are excellent firms looking for PI coverage who are not achieving any differentiated consideration.

“Elite is big enough to vouch for itself, but after research we are very happy that it is a company that understands the product, has an excellent approach to claims and is financially sound. It has a substantial book of solicitors PI cover and is used by some of the largest brokers.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. More like PI Brokers worried about their cut of the commission methinks?

  2. Unregulated; Gibralter based; unrated – come on !!
    I would be deeply suspicious of any IFA using such an ‘insurer’ to protect the interests of their clients (for that is the ultimate purpose of PI cover). In the same way you can tell much about a person by the company they keep; so you can tell much about the judgement and integrity of an adviser by the insurer they choose to protect their clients.
    Justification?: look at who chose Quinn, Balva et al …. and what happened to them.
    Caveat emptor with knobs on

  3. “jinker | 22 August 2014 12:13 pm
    More like PI Brokers worried about their cut of the commission methinks?”

    Possibly, but I was more taken by the unintended irony of those making the comments 🙂

  4. jinker | 22 August 2014 12:13 pm:
    “More like PI Brokers worried about their cut of the commission methinks?”

    Possibly, but I was more taken by the unintended irony of those making the comments 🙂

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