He already tends to compile a full pack of materials as encouraged by brokers and insurers, which goes beyond the simple consideration of the risks of a business proposition.
"Certainly we ‘try’ to enhance our processes and protocols all the time and then to communicate such things to insurers to help them believe we are a professional and organised business," he says.
Daniel Wiltshire, a former actuary, now IFA at Wiltshire Wealth, is in favour of insurers taking a broader approach in their underwriting and agrees this could stabilise the market.
But it's not as straightforward, he says.
"It's clear that PII underwriting lacks sophistication and would benefit from a more holistic view of the drivers of risk. I certainly think that better underwriting would create a more stable PI market.
"However one of the biggest challenges for insurers is the evolving regulatory landscape and concerns that the FCA might move the goal posts in future."
He also agrees culture has a big influence on adviser behaviour but says it's "difficult to quantify objectively".
"If I was an insurer I would also consider rapid growth (either through acquisition or organically) as a red flag," he adds.
Mel Holman, managing director at Compliance & Training Solutions, questions what unintended consequences such an approach might have on market dynamics if adopted more widely, though she agrees with it in principle.
"I think [it] can reflect much better how a firm operates," she says.
"[But] will the end client end up only using large third party providers as they are the only ones on the PI underwriters panel? Could this mean that they pay more for these services than just the PI?"
That's the million-dollar question.
carmen.reichman@ft.com
