Professional indemnity insurance premiums could fall by 50 per cent because problems with IFAs have failed to materialise, says PI broker PYV.
PYV says it has recently been able to negotiate up to 50 per cent reductions in premiums for some IFAs and director Neil Pointon expects excess and conditions terms to improve in the future.
Pointon says there is an additional 25 per cent of capacity in the PI market for IFAs with the re-entry of Chubb Insurance, which started writing IFA business again in July after nearly a year out of the market, and recent moves from other Lloyd's syndicates previously unwilling to write IFA business which are now starting to go after it aggressively.
Pointon puts this down to a lack of scares in the IFA market lately – the problems with endowments have not sparked off an FSA review while split caps and precipice bonds have not become the issues they might have.
He says this, coupled with the flexible new requirements on PI from the FSA, means that PI insurers are less concerned about underwriting IFAs and so the market has grown in capacity and bettered its terms.
Pointon says: “The market for PI has turned and there is now an additional 25 per cent capacity out there, with potentially limitless capacity for IFAs given the small size of the market they represent.”
Aifa director of policy Fay Goddard says: “We are getting a much more positive message back about the PI market at the moment.”