Adviser Ratings launches adviser PI offering
Adviser Ratings has entered a strategic partnership to introduce a professional indemnity (PI) insurance solution, aimed at opening up adviser supply and improving trust in the industry.
The wealth data platform has partnered with Numerisk, an insurance broker, to launch the PI insurance product to the financial advice profession.
According to Adviser Ratings, the offering will utilise the research firm’s insights as a foundation to underwriting and pricing, as well as Numerisk data on insurance broking.
The new offering seeks to solve a consistent challenge for advisers: accessing high-quality yet cost-effective PI insurance as an advice practice.
Moreover, both companies expect the PI solution to expand the adviser supply pool in Australia and ultimately strengthen trust in the industry by providing a level of coverage for advisers’ clients that was not previously offered.
Angus Woods, managing director of Adviser Ratings, recognised the opportunity presented in Adviser Ratings’ data to improve PI underwriting and widen the number of insurers in the market.
“We saw Numerisk as a natural partner for us as we continue to find ways to leverage our investment in high-quality information to improve outcomes for consumers and advisers alike,” he explained.
Commenting on the product launch, Numerisk managing director Richard Silberman described the PI market as “financially unpalatable” due to considerable obstacles.
He also attributed the difficult PI landscape as a significant driver in the reduction of adviser numbers in the past five years following the royal commission.
“There have been few winners in the past decade, and we see success as a market where insurers can deliver a profit and advisers can enjoy conditions that aren’t a drag on their margins,” he said.
“Our focus is about providing value to all stakeholders – advisers and insurers alike. Our view is that the only solution to solve these challenges needs to be deeply ensconced in accurate, reliable and complete quantitative data across the entire industry.”
Last month, Silberman observed that more nuanced and data-driven approaches to underwriting have seen “significant premium improvements”.
As a result, he believes 2024 will be a crucial year for advice businesses to reconsider their PI insurance and reset cost bases.
“At a minimum, premiums should be flat with substantial improvements in excesses and coverage or considerable reductions,” he said.
This trend, coupled with advice practices reporting higher profit margins and more stable operational costs, creates the ideal combination for higher salaries in advice this year, according to Adviser Ratings.
AUTHOR
Jasmine Siljic
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