50% rise in professional indemnity insurance for Independent Financial Advisors

According to Jamie Newell, Managing Director of IFA Solutions, Independent Financial Advisors should expect a 50% or more increase on their professional indemnity insurance premiums.

The underwriters fear that investment conditions may result in more clients trying to claim on their policies under the grounds of mis-selling.

With an increase in external costs, higher inflation and the instability in the Eurozone, Insurers are having to raise the cost of their premiums.

This is also partly to do with the Insurance Market’s capacity for IFA businesses decreasing since Quinn Insurance were put into administration in 2010. Two London underwriters have indicated that they will not be renewing IFA policies this year. Independent Financial advisors need to start looking around for companies that provide a reasonable rate for professional indemnity insurances.