New and cheaper PI insurance hits the market

Advisers have a new option for their professional indemnity insurance market with the arrival of a new player.

Quadrant PI is offering easy access to cover, nostrings-attached quotes, clarity and transparency around policy wording and fees, and premiums that last year were about 10%-15% lower than their competitors.

The new company is the brainchild of a small group of advisers who saw their annual PI premiums skyrocket in price about 18 months ago. Their risk profiles hadn’t changed, and there had been no adverse claims against them but their premiums had suddenly tripled.

At the small end of town this meant premiums for a single adviser/director soared from $2,500 per year to $4,000, while at the bigger end of the market premiums for a firm with five to six advisers rose from $10-11,000 to $30,000 annually.

Quadrant director Tony Vidler says the recent sudden rise in premiums was covered off by insurance companies claiming advisers have moved into a riskier environment now they are regulated. “To be told they are in a riskier environment when the general consensus is the public is safer because of regulation, beggars belief,” he says.

Insurers also changed their model on assessing risk. “Now they assess a business overall and not individual advisers and say this means premiums had to rise.

“There was also the perennial excuse that they are under pressure from reinsurers,” he says.

“However, insurance companies never produce any data on how many PI claims they deal with in a year, although advisers have to let their insurance company know if a claim could be made against them.”

"But in an ever-changing industry, we need to evolve to keep up with demands and to continue adding value to advisers. TAP’s greater level of resourcing, capabilities, and exceptional technology platform will offer increased servicing to advisers," he says.

"The acquisition of Q Group is a testament to Geoff Bawden’s knowledge and expertise and will enable TAP to enhance and accelerate our growth plans in providing outstanding service, and an extremely competitive product to advisers”.

Under the new operations Bawden will transition to head of mortgage adviser distribution.

While some PI providers require advisers to join an industry association and agree not to shop around among competitors before giving them a quote, Quadrant welcomes all comers who meet its criteria.

“We’ve made it easy for someone to get a quote, regardless of where they are, which most of the other schemes don’t allow,” Vidler says.

Advisers who want to check out Quadrant can see the policy wording before buying a policy – something which until recently was almost unheard, with most PI providers preferring to leave policyholders in the dark about the wording until they have bought cover. Even then, some providers will not give policy wording. “Many schemes flatly refuse to provide policy wording,” Vidler says. “Supposedly, it’s because they think that giving out the wording will somehow encourage more claims.”

Quadrant’s directors are Royden Shotter (chairman), Jason Kilworth, Kevin Smee and Tony Vidler. The Quadrant product is underwritten by QBE and accessible through broker Phil Mitchell of Hutchison Rodway. ✚