Protection Watch - November 2013


Aviva recently announced it will underwrite all...

1. Make it your own

Aviva recently announced it will underwrite all individual income protection policies on an ‘own occupation‘ basis, which is generally to be welcomed. Insurers use different definitions of being unable to work including own and suited occupation. Issues come with other definitions in use, which can be summarised as ‘List-based’ definitions, including Work Tasks. These definitions, which should be avoided wherever possible, rely on a list of tasks the policyholder needs to be unable to do. Advisers should take a look at an insurer’s declined list as well – the list of occupations which are automatically declined cover as this will no doubt increase as a consequence. Likewise a further consequence could be price – it is possible, although certainly not definite, that we may see prices increase in future as a result of more people having better cover, although this is arguably a fair price to pay.
VERDICT: Promising lead

2. Falling down

Several insurers have reported a fall in their protection sales so far this year. While this seems disappointing at first glance, the market was expecting sales to fall – probably by more than they actually have. The pricing changes introduced at the beginning of the year, which followed various changes in legislation, meant that protection premiums stopped getting cheaper, at least for the time being, which in turn makes it harder to re-broke (or churn) existing business to save the client money. You can only switch around on price if prices are falling of course, not when they are rising.
VERDICT: Back to the drawing board

3. IFA takes on claims management firm – and wins

Highclere Financial Services has been awarded £340 through the small claims court after contesting a payment protection insurance misselling claim from a claims management firm. Aims Reclaim was forced to pay Highclere partner Alan Lakey £100 for wasting his time and a further £240.20 in legal costs after writing to the adviser alleging his firm had missold a client PPI. Yet Lakey says he has never arranged PPI and that the client in question says they did not make a claim against him to Aims Reclaim. He invoiced the firm for £100 for wasting his time and when the firm refused, commenced legal action.
VERDICT: A good day for advisers

4. Men at work

9 in ten people believe that employers should play a more active role in wider benefit provision but over three-quarters of employers provide no life, income protection or critical illness cover at all, a new report by Swiss Re has revealed. With auto-enrolment and the growth of policies such as relevant life, these areas could represent a very good opportunity for the protection industry.
VERDICT: Promising lead

5. Sick, sober and sorry

According to LV = the average Brit spends almost a year off sick throughout their working life. The survey of full-time workers, revealed stress and depression are two of the most common long-illnesses. Workers said they took an average of two and a half months (81 days) off to recover from these conditions.
VERDICT: Back to work

This article first appeared in Professional Adviser magazine