Hoyl Underwriting Management (HUM), which offers intermediary PI insurance, has witnessed a large number of enquiries from adviser firms looking to manage the escalating costs of PI cover.
Launched in July this year, HUM’s proposition operates by working directly with its intermediary clients on an ongoing basis of shared management information. It aims to bring down the cost of PI by treating each client as a separate risk, and the business claims this strategy is gaining traction with adviser firms.
Paul Barnes, director at HUM, claimed the old methodology of lumping all advisers together in one risk pool might be convenient, but it gives no incentive for good firms who manage their businesses well to benefit while intermediaries who take unnecessary risks make sure that premiums have been going up across the board.
He said: “When we explain our proposition, advisers can immediately see how much better off they can be when their individual circumstances and the way they run their businesses can have a direct and beneficial effect on their future premium levels.
“No longer lumped together paying for others’ errors, our client firms are benefitting from being part of a virtuous circle, where by making us part of their reporting structure, they can be assured that their premiums will reflect the level of competence and good management they bring to their businesses.
“We have seen what happens when financial advisers are informed with little or no notice that cover has been withdrawn or their premium level for the coming year has been increased. The main PI insurers have had a captive audience for so long because there has been little or no competition and innovation.
“While we are still at an early stage in our development, from the growing number of firms contacting us, it is clear that our proposition is finding favour.”
