Last week, international insurer Axis – a well-known provider of PI cover for financial advisers in Australia – announced it would wind down its retail insurance operations in Australia, Axis Specialty Australia (ASA).
While the company said it would cease to quote new and renewal business as of 8 October 2015, a statement issued by the insurer said it will still provide cover for financial advisers in the Australian market through overseas offices.
“Axis will continue to write Australian-domiciled business via its London and Singapore Branches and via its Lloyds Syndicate 1686,” an Axis letter to customers said.
“The decision to close the Australian branch is a strategic one based on specific factors that were identified in a strategic review of the [Australian] business. ASA continues to be authorised and supervised by the Australian Prudential Regulation Authority,” it said.
Despite Axis closing its Australian business Daniel Waters, general manager of professional services at provider of PI services for advisers, Strathearn Insurance Brokers said that coverage costs may actually be reduced.
He said that obtaining cover through the London-based business may possibly be cheaper for advisers.
Senior technical officer of insurance brokergae firm Mega Capital, Elinor Miller, agreed with Mr Waters’ comments adding that she does not expect Axis’ exit from Australia will have any “significant implications for financial advisers”.
“Given that Axis is not a major player in the financial services insurance market, we do not believe that their exit will have a significant impact on premiums or capacity in the Australian financial services insurance market,” Ms Miller said.
Despite the exit of some notable PI insurance providers from the Australian market, Mr Waters said there are still quite a number of players in the industry offering cover for advisers.
“[For example,] Allianz are quoting financial advisers, AIG are quoting financial advisers, Chubb can quote certain financial advisers, there is Newline which is a Lloyds-based company operating in Australia, and XL Catlin can write financial advisers,” Mr Waters said.
There are many insurers and plenty of capacity for advisers to get professional indemnity cover, he added.
