Professional indemnity insurers are increasingly offering longer-term policies, which brokers say should benefit intermediaries.
Prime Professions director Richard Brown says 12-month and 18-month terms have been the standard for advisers but many insurers are now enabling advisers to lock in the current soft market rates for longer periods.
Brown says: “We are definitely seeing more two-year policies. The advisers should benefit from the better budgetary control that comes with a longer-term policy while the underwriter gets a longer level of commitment from a client that chooses to remain with them.”
He says longer-term policies are due to falling numbers of endowment and pension review misselling cases.
Brown says: “After the many problems in the IFA sector, this should give them more confidence as a nice signal that the worst days are behind them.”
PYV managing director Neil Pointon says: “It could be a way of locking clients in now before the market starts to harden.”
Collegiate head of legal Martin Archer says insurers are moving now to tie in clients to longer-term deals because they perceive that the market will turn into a harder cycle.
He says: “Locking in that level of security is a bit like buying a fixed-rate mortgage. They might find themselves having to twist the underwriters’ arm though.”