Professional indemnity insurance (PII) underwriter Chubb is withdrawing from the market for financial advisers.
The company has contacted a number of brokers in the past week to inform them of the decision to stop accepting new business or renewals, although it will continue to honour quotations already given for a short period.
Existing policies will remain in place until their renewal dates, while Chubb is ceasing to provide cover for surveyors.
Neil Pointon, director of retail at Howden Insurance Brokers, suggested the move was a further sign of a hardening market.
He said: "The market was getting tougher and the reason for this is the increasing number of claims arising in the IFA sector. It certainly hasn't been helped by Arch Cru and Keydata, among other issues.
"We're anticipating getting touch with all clients affected and we're already in talks with a number of major players to make sure the clients receive special treatment."
A Chubb spokesperson said: "Chubb can confirm that it is withdrawing with immediate effect from the surveyors and valuers and IFA professional indemnity lines of business offered though its Lloyd's Syndicate, Chubb 1882.
"From a profitability standpoint, Chubb has concluded that it is no longer viable to continue these lines of business.
"Chubb will honour any terms currently on offer to brokers on these lines of business."
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