Independent ratings agency Adviser Ratings has partnered with insurance broker Numerisk to launch a professional indemnity (PI) insurance product tailored to financial advisers.
The insurance product will use Adviser Ratings and Numerisk data as a foundation for determining the underwriting and pricing of policies and will be fully backed by Lloyds of London.
Numerisk founder and managing director Richard Silberman acknowledged improving insurance accessibility for advisers was a key motivation behind partnering with Adviser Ratings for the initiative.
“The market has been financially unpalatable with considerable obstacles for all concerned. The tough PI market has played a significant role in the reduction of adviser numbers over the last five years,” Silberman said.
“There have been few winners in the past decade and we see success as a market where insurers can deliver a profit and advisers can enjoy conditions that aren’t a drag on their margins. Our focus is about providing value to all stakeholders – advisers and insurers alike.
“Our view is the only solution to solve these challenges needs to be deeply ensconced in accurate, reliable and complete quantitative data across the entire industry.”
According to Adviser Ratings, the insurance offering will make full use of the insights the firm has on every adviser, practice and licensee in Australia over the past decade.
Adviser Ratings managing director Angus Woods said the new PI insurance product had been “several years in the making” and aims to offer a level of coverage to advisers and their clients that did not exist before.
“Adviser Ratings has a long history of delivering value to advisers. We saw Numerisk as a natural partner for us as we continue to find ways to leverage our investment in high-quality information to improve outcomes for consumers and advisers alike,” Woods said.
The release of the insurance product comes at a time when some quarters of the industry have expressed concerns about underwriters hesitating to offer coverage to advisers serving SMSF clients.