AAP – which has a membership of “over 200 independently-owned boutique licensees” – has responded to the increasing exodus of insurers willing to service the adviser market by launching its own solution.
According to a statement, the “AAP PI solution” has been successful because insurers are less hesitant to cover boutique firms that have the backing of a recognised compliance program.
“From the insurers’ perspective, their increased wariness is understandable,” said AAP chief executive Soula Cargakis.
“What they really need is some assurance of the professional standards and compliance framework that underpins your practice.”
Ms Cargakis said the AAP PI product is having a wider impact on the PI insurance market for financial planners more broadly.
“Importantly, the product is available through an adviser’s existing insurance broker, as many adviser practices wish to maintain this relationship,” she said.
“We believe that this solution is already putting downward pressure on rates as we’ve found that existing insurers have reduced their rates to compete.”
Ms Cargakis said average renewal premiums have reduced by 10 to 15 per cent since the AAP PI solution was launched earlier this year, with renewal quotes provided within 6 to 4 weeks of the renewal date.
