Smaller firms hit hardest by rapidly rising PI rates

Professional Indemnity premiums have risen 20% over the past three years for financial advisers, research has found.

Financial advisory firms earning up to £100,000 a year paid the highest premiums relative to their revenue, Money Marketing reported.

In 2017, 3.8% of their revenue went towards their premium on average, while this figure increased to 3.8% in 2018 and 4.4% in 2019.

But businesses with a turnover great than £10m only saw premiums increase by 0.8% in 2017, and 1.2% in 2019.

The research also reported a rise in PI exclusions over the same period.

Firms earning less than £100,000 paid an average premium of £2,727 in 2019, while those earning over £10m paid £968,143 on average last year.

Last month, Insurance Times reported that the solicitors’ PI sector was facing significant rate rises.