TenetSelect is warning adviser firms not to leave their Professional Indemnity Insurance (PII) preparation until the weeks before their renewal is due and says there is a lot of positive work that firms can do throughout the policy year to help them get the best terms.
The adviser support service said that, firstly, it is important for firms to be aware of what areas and activities their insurer has been focusing on during the policy year. Most firms do not have any regular contact with their broker between renewals and insurers’ appetites tend to change over a policy year. Therefore, it is better for firms to be aware if they are conducting any activities that are now on the radar and attracting higher rates, excesses or even exclusions, TenetSelect said.
It added that insurers are increasingly looking for full details on high risk activities, so firms should be prepared to maintain comprehensive data, ideally with a printable list of each type of investment, showing amounts, provider, performance and percentage of a client’s investor portfolio that can be shared with the insurer. This also follows with claims data and maintaining a full claims register will strengthen any application, especially if it demonstrates a clear and prompt approach to any previous systematic exposures.
Insurers are also reassured by evidence of formal structures and systems within a business, so firms should ensure they have clear documentation of internal procedures and updated suites of documentation, as these can be submitted along with renewal forms. Evidence of robust procedures to identify, assess and control risk is equally an important factor.
Mike O’Brien, managing director of TenetSelect, said: “Obtaining professional indemnity insurance on the right terms, at the right price is an on-going challenge for many of our Select firms. However, by understanding what data their insurer is looking for, firms can maintain the relevant information through the year and submit their renewal forms, with all supporting data, nice and early. This will really help firms in getting the best terms on their PII.”
Julian Brincat, head of IFA Practice at specialist insurance broker Protean Risk, added: “IFA firms are advised to prepare their internal systems in advance, in order to provide the information requested at renewal. One of the most significant factors for firms receiving onerous terms is preparing their submission too close to their renewal date and being unable to extract the requested information from their systems in a format that the underwriters can readily review.”