AIOFP appeals to key insurers for PI premium cut
|
|
The Association of Independently-Owned Financial Planners board is today meeting with Australia’s five insurance underwriters to ask for a 25 per cent reduction in professional indemnity (PI) premiums for its members.
The presentation, to be delivered in conjunction with brokers Marsh, which has been instructed to establish a group PI scheme for AIOFP members, will be based on the basis of “having volume and research risk under control”.
Executive director Peter Johnston said the decision to approach the underwriters was triggered by some AIOFP members having received a 200 per cent increase in PI premiums this financial year.
“About 12 months ago PI premiums were about 1 per cent of total revenue, and they’re now approaching 2.5 per cent.
“There’s real concern within the group that we could return to the peak figure of 5 per cent of about six years ago.”
Johnston said the AIOFP is hoping it will be able to persuade the insurers to agree to offer members a 25 per cent discount on the premiums.
The presentation will focus on the “merits of practices that have conflict-free research facilities in place to mitigate the risk of product failure".
“Our sell to our underwriters is that we’ve mitigated risk by recently launching a Filtered Risk Committee (FRC) to eliminate conflicts of interests with APL and research decisions, and therefore deserve a discount on PI insurance.”
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
