HOW TO RENEW PI INSURANCE AND REDUCE YOUR PREMIUM

Only a few years ago, this article would have read very differently.

Back in 2020, simply securing professional indemnity insurance (PI) was the focus for most firms, as the market was extremely tight. Particularly for those providing DB pension transfer advice.

While many of the core principles remain the same, the PI landscape has shifted in the last five years. The market is now softer and that opens up opportunities, not only to secure comprehensive cover, but also to reduce your premium.

Gone are the days when those who had given DB advice had to wait anxiously to see if exclusions would be imposed on their PI renewal. In fact, we are now seeing some insurers offering DB cover to firms who haven’t had it for years.

With this shifting landscape in mind, now seems like a good time to refresh our top tips to help you negotiate the best deal in this year’s renewal season:

Preparation is key

As the saying goes, ‘fail to prepare, prepare to fail.’ Don’t leave work on your PI insurance renewal to the last minute. Start pulling your application together and engaging with your broker and underwriter well in advance. If you don’t, you risk delays or worse, gaps in your cover.

Begin reviewing your application four to six months before renewal, ask for the form and start your submission. Having this ready in good time allows your broker to:

• Present your case thoroughly
• Respond to underwriter queries
• Negotiate terms on your behalf
• Approach the wider market if required

External compliance support

As the FCA is placing more focus on the need for smaller firms to have external compliance oversight, some insurers have started asking for evidence of an annual audit carried out by a third-party compliance specialist.

This may need to be submitted as part of your PI application. Why? Insurers are increasingly interested in how your firm is run and want to identify any areas of weakness that could lead to future complaints. Demonstrating proactive compliance management can go a long way in securing favourable terms.

Make your application informative

Like you, brokers and insurers are busy. So, the easier you make their job, the better the likely outcome. How you present your application has a significant bearing on how it’s assessed. An incomplete or poorly presented form will end up at the bottom of the pile. A well-prepared one gives the insurer confidence in your governance and approach to regulatory responsibilities.

Before submitting your application, make sure you:

• Complete the application form in full
• Include additional information in the covering letter if space is limited
• Provide documents outlining your systems and processes

 Ask for a meeting with the underwriter

If your broker can arrange a meeting with the underwriter, you have a chance to present your firm directly. Talk about your business model, how you operate, your compliance arrangements and why your firm is low risk.

It’s far easier to build trust and understanding in a direct conversation than through a form. If the underwriter has met you (even virtually), they’re more likely to back your application and negotiate favourable terms.

Exclusions or restrictions

Back in 2020, the focus was on exclusions concerning DB transfer advice. Today we are seeing new ones emerge, particularly around annual review services.

For example, some policies state that if you haven’t delivered ongoing reviews in line with your client agreements, any related complaint may not be covered. This is likely linked to the FCA’s increasing scrutiny of ongoing advice services.

If your renewal includes new exclusions or limitations, don’t be afraid to ask why. Request your broker challenges the insurer and finds out why they have been added. What is the rationale? Can the exclusion be amended or removed?

We still see many firms accepting an insurer’s first offer without pushing back. Those who do challenge them are often rewarded by having exclusions reduced or removed.

Shop around

There is still a limited number of PI insurance providers in the advice/planning market. Having an history with your current insurer can be helpful as your business is a known quantity, which provides some comfort. On this basis, we would not recommend switching just to reduce your premium.

That said, it is always worth sourcing a comparison quote. It can serve as a useful benchmark and negotiation tool. If your current insurer won’t budge on an exclusion or won’t offer a reduction on your premium, having an alternative can give you leverage – or a back-up plan if the renewal doesn’t go your way.

How good is your broker?

Perhaps the most important factor in securing good PI cover at a competitive price is the support you receive from your broker. They should act in your best interests – not just chase the commission. If you feel you are not receiving the service you need, perhaps it’s time for a change.

Your broker should:

• Understand your business and risk profile
• Respond to emails promptly
• Engage across the market—not just with one or two insurers
• Have direct access to underwriters
• Explore secondary cover options where exclusions apply

The proof is in the premium

Following these steps can make a real difference to the PI cover you receive. We recently supported a firm through renewal, working closely with its broker to follow these principles. We achieved a 25% reduction in premium, plus an extra month on the policy!

Even in today’s softer market, negotiating the right cover takes time and effort. But, with the right preparation, support and strategy, renewing your insurance doesn’t have to be a headache. It could even be a cost-saving opportunity.

If you would like to know more about how to prepare a PI insurance renewal, contact us on (0161) 521 8641 or email: info@b-compliant.co.uk