Adviser support group Tenet has raised concerns over professional indemnity (PI) rates.
Tenet says insurance premiums are set to soar, as insurers react to a 40% rise in claim value. In addition, the Financial Ombudsman Service could double award payments to £200,000, the FSA are promoting more intrusive regulation and there is still no long-stop against claims.
Market volatility and an increase in fraud, particularly in the mortgage sector, has put pressure on insurers, who are responding accordingly, Tenet argues. Claims against intermediaries are also becoming a major concern and the impact will inevitably put increasing financial pressure on adviser firms, it adds.
Keith Richards, Tenet’s group distribution and development director, believes the financial impact will not necessarily be limited to higher annual premiums and suggested increased excesses and specific policy exclusions could be of greater significance.
He said: “Underwriters are becoming increasingly selective