PaymenT ProTecTion insurance and morTgage PaymenT ProTecTion insurance Have been slammed in THe media as a resulT of mis-selling ParTicularly on PPi. How Has THis imPacTed on mPPi sales and is mPPi sTill a relevanT ProducT? Peter Brodnicki: It’s not affected sales of MPPI for our business. The significantly reduced volume of mortgages is what has reduced the sales in MPPI more than anything else. But as a result of the bad publicity, you’ve got to take MPPI and disassociate it from PPI. They are not the same thing.
Robert Sinclair: Debates about whether PPI was mis-sold or mis-priced are academic now because we’re in a situation now where people have the right to claim. Interestingly I don’t think the Financial Services Authority sees PPI in the same space as MPPI. In that respect therefore it’s not as tarnished. The challenge for the industry is to ask the question: is this just about protecting people from unemployment or is it a much more rigorous debate guiding people about what business they’ve got, what budgets are available and what their priorities are in what they do. Geoff Hall: MMPI is not suitable for everybody but a lot of people should be considering it. In fact I think the media coverage gives IFAs and mortgage brokers an opportunity to explain MPPI properly to clients. In our experience when they explain it, clients have bought it. MPPI does not just cover your mortgage it covers other expenses as well. You have to think about clients’ lifestyle situations and the appropriate and affordable level of cover for them. It’s also important to point out that while PPI had a bad press, MPPI hasn’t. The public media doesn’t differentiate them though and hence the customers don’t understand the difference. That’s where the professional adviser should be using their expertise to explain what the cover is and allow clients to decide whether they want to buy it. THe scandal surrounding
income protection which take a bit longer to get onto the books but ultimately provide a much better understanding of cover for the customer. Finding a halfway house between those two sorts of products that would be easy to implement, easy to understand, and cost effective for customers to take on board is a good idea.
Short-term income protection does offer slightly more rounded cover and a slightly differentiated premium for paying on a client’s risk ratio yes, I think the product is a good idea under those circumstances. Jason Berry: The important thing about PPI is at what point claims are underwritten. If I can get increased confidence from providers that underwriting occurs when they take out the policy, then I would have increased confidence to promote and sell the total product. I’m not too fussed about what innovation is, I just want confidence that when a customer has a claim it’s paid. Phil Brown: I fully endorse that and I think life insurance providers and income protection providers want to write policies they’ll pay if a legitimate claim is made. They’re taking people’s money and paying out at a time of need and it is vital clients have peace of mind that at claims stage they do not face unreasonable barriers. That’s all part of Treating Customers
PPi Has encouraged innovaTion in THe markeT and various sHorT-Term income ProTecTion ProducTs are coming onTo THe markeT, is THis wHere THe fuTure lies? Phil Jeynes: Inherently there’s nothing wrong with PPI as a product and there’s definitely nothing wrong with MPPI. The issue is the way that it was sold and the understanding the consumer has about what the product they’ve bought is designed to do. The great thing about PPI and MPPI from our point of view as sales people is that it’s really easy to sell. You just tick the box and there’s very little underwriting, your commission is paid quite quickly and customers are covered fairly instantly. However, we should be selling it in conjunction with rounded products like
Fairly. Payment of a claim is the moment of truth for a company and if we get that wrong then we have to admit we screwed up. I think that it’s right to get the underwriting done up front and we pay valid claims quickly with minimal fuss. GH: Most honest claims get paid and get paid quickly. Claims that get declined are for genuine reasons and the vast majority are declined either because of a pre- existing condition which was excluded from the policy at the sales point or because the client knew they were going to be made redundant when they bought it. This idea within the industry that clients won’t be able to claim and the insurance company is going to pull out is just not fair on the industry. It’s a wrong interpretation of the product. you’ve menTioned THe imPorTance of Paying claims because THaT’s mortgage introducer JUNE 2011 37
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60