Protection Watch 5
More more more CI claims being paid, plus Battle Royale: ABI+ Definitions
Protection Watch with Kevin Carr
5. More More More CI claims being paid
VERDICT: UP
It was roughly six years ago when LifeSearch began the campaign calling for insurers to publish their paid and declined CI claim stats. Despite some hostile criticism at the time (against a backdrop of overwhelming support from consumer groups and the media) I’m very pleased to see companies not only still publishing the stats but reporting ever improving pay out rates as well. I don’t think we’ll ever quite get to 100% (and arguably shouldn’t ) but there’s no reason why the industry cannot and will not rise to 95% in the coming years. The next step – if there is one – is to include information on partial payouts as well. There won’t have been too many yet, but there will be many more in the future.
4. Battle Royale: ABI+ Definitions
VERDICT: UP
Defaqto says the Critical Illness Cover ‘illness race’ has moved on from companies merely adding new conditions and is now about companies offering improved definitions i.e. definitions which are better than the ABI minimum standard, known as ‘ABI+’. I’ve always said that if all else was the same (which in truth it rarely is) that the longer the list of conditions the better – or perhaps it is better put this way: I’d rather have it on the list than not on the list, even if I’ve never heard of it. And the ABI+ race is no different. When it comes to my own cover, I’d rather have better definitions. Who wouldn’t? I’d also rather have claims paid earlier. Who wouldn’t.
3. Dr No?
VERDICT: UP
Zurich has scrapped Doctor’s reports when underwriting applicants aged under 35 applying for less than £1m of life cover. Doctor’s reports add delays and cost money. Tele-underwriting is a great improvement for some, but it isn’t the only one. The more the industry can do to simplify the buying process the better. Well, probably. The easier something is to buy the more people will switch around.
2. We’re gonna get loaded
VERDICT: DOWN
This has been perhaps the hottest topic in protection circles in recent weeks. The debate is that some distributors charge a higher ‘loaded’ premium and receive more commission as a result. It’s not new but it has divided opinion in the industry. On the one hand supermarkets and other retailers can charge different prices for the same goods so why can’t IFAs. On the other hand is it TCF? The only point worth adding to the debate is that whatever price is charged, and no matter how it is charged, it must be justified. And it wouldn’t surprise me if having confirmed that commission will stay in the protection world, FSA reviewed the rules and set up some boundaries going forward.
1. Moving on up: More intermediaries selling protection
VERDICT: UP
A recent survey by the PFS and Protection Review found that 5.9% of PFS member’s current business now relates purely to long-term protection compared to just 0.4% and 0.8% in previous years. This is a significant increase, which perhaps reflects the view that protection is a valuable business area in its own right and more than just an ‘add-on’ to other sales. The increase may also be linked to commission and falling prices but most importantly we have a hugely underinsured population.
Kevin Carr is Chief Executive of the Protection Review and Managing Director of Kevin Carr Consulting.
www.protectionreview.co.uk
www.kevincarrconsulting.co.uk
© Article reproduced by kind permission of IFAonline
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