News Review: Protection
Critical illness payouts continuing to improve
News in brief
by
Kevin Carr
chief
executive of the Protection Review and MD of Kevin Carr Consulting
more critical illness claims were paid out in 2009 than ever before and many believe the statistics are genuinely starting to improve adviser, consumer and regular con- fidence. Just a few years ago we couldn’t switch on Watchdog or open a Sunday newspaper money section without read- ing about yet another de- clined critical illness claim. However, a concerted indus- try effort to move forward, including significant work from the aBi and Financial ombudsman Service, as well as repeated ongoing pressure from iFas and the media has
led to much improvement, especially in the area of non- disclosure. in 2006, the uK ci market
was paying around 80% of claims on average, which has increased to 90.6% in 2009 – an increase of 10% over roughly three years. roger
edwards, of
Bright grey said: “this has undoubtedly had a huge impact on customer con- fidence and it is a shame that all these positive mes- sages have happened dur- ing a recession and during a downturn in sales. imagine if these statistics and the posi- tive messages had happened when critical illness was at its peak?” While publishing these
annual statistics is now the norm amongst protection providers, ensuring the num- bers remain meaningful to
consumers is one of the most important issues going for- ward. iFa alan Lakey of High-
clere said: “the claim statis- tics have helped greatly and served to deflect the large amounts of negative criticism that swirled around five years ago. However, to be even more meaningful, and to en- able some form of context, providers should consider explaining the rejections further so that advisers, con- sumers and journalists can better understand the ratio- nale.” the situation with other products, such as income Protection, isn’t yet quite as transparent. currently, roughly half the iP market publishes claims figures, which are all in excess of 90% including Pioneer, Legal & general, LV= and aegon.
Should protection providers do more to help mortgage intermediaries sell more protection?
It seems some protection providers may have given up on the mortgage market when it comes to protection sales on the basis that if they haven’t started selling protection by the bucket load yet, they never will. While it is true that mortgage related protection sales are down significantly on previous years, I wonder if there is more to it. Some mortgage brokers may never have been involved with protection in the past while others may have simply forgotten. Personally, I think most life offices haven’t done enough to help mortgage brokers sell more protection. They seem to expect the
mortgage market to just switch overnight and start selling lots of critical illness cover and income protection – but could the protection market do the same? If protection sales dried up could they all start selling a range of mortgages over night? I suspect not. So why expect the mortgage market to do so. Instead of patronising columns pointing out the obvious needs for protection, which many brokers already know, it strikes me that mortgage intermediaries would benefit more from better support and training on how to sell protection – including a wider knowledge of the market to build mutual confidence and trust.
• Aviva has reduced the number of doctor reports requested for life insurance applications by 60% by capturing extra medical information using nurses and underwriters to speak to customers
• AEGON has extended its tele-claims service to include income protection, waiver of premium and total and permanent disability, following a successful roll-out in March of the tele- claims service across critical illness and terminal illness claims
• PruProtect has launched a World Cup fantasy football competition to win an Apple iPad; entries must be submitted before June 10th
• Bupa Individual Protection head of sales Mark Anders has left the company to Join Fortis Life
• Zurich has expanding the eligibility of its life and critical illness cover, enabling customers, to benefit from life cover at older age, such as increasing the maximum eligibility age for term assurance applications from 65yrs to 83yrs
• Direct Life & Pensions MD Michael Ward has resigned with Rob Quayle taking up the post
• Aviva paid out 91% of its critical illness claims in 2009
12 mortgage introducer JUNE 2010
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