'Unfortunate' increase in Professional Indemnity (PI) insurance costs to happen because of falling pound - PI for IFAs

4/12/2008

The waning strength of the pound will have an unfortunate effect on the cost of Professional Indemnity (PI) insurance, it has been reported.

Nick Bamford, managing director of independent financial adviser Informed Choice, has agreed with recent comments made by Neil Pointon - CEO of specialist PI insurance broker PYV - that the declining value of the pound against the euro is set to see PI premiums increase.

Mr Bamford stated that such a rise is, "unfortunately", a consequence that is "unavoidable" as a result of the weak exchange rate, Money Marketing reports.

He added that "it is a shame to hear that prices are going to increase", particularly as Britain faces a recession.

The publication, meanwhile, points to comments by the Financial Services Authority (FSA) that it will not get involved in pricing PI insurance, as it is a matter for the EU directive.

A spokesperson for the FSA said: "The underwriters' decision on how to price PI will be a matter for the insurance companies."

Meanwhile, an article by legal practice Barlow Lyde & Gilbert, published on online resource Mondaq last month, reported that the number of PI claims being filed is set to increase as a result of the financial crisis.

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PYV are one of the UK's leading providers of professional indemnity insurance. This news article has been produced by Adfero in collaboration with PYV and its unauthorised use is not permitted.

(c) 2008 Adfero Ltd.

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