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Protection market review - October 2016

Protection market news update for October 2016

Macro news and drivers

Pockets of growth arise famid sluggish protection sales -Mortgage term protection sales rose 7.3% (£1.4m) to £20.5m in Q2, following a 4.1% (£1.8bn) rise in mortgage sales during the same period according to exclusive research given to COVER.

Critical illness cover is on life support - To much fanfare, product providers publish their annual new figures in the first quarter of each year. Have they built upon their previous successes? Have they increased their market share? Such declarations give us an insight as to the shape of the provider in question but also about financial services markets in general.

Bankhall and OMS Mortgage Club launch mortgage protection and compliance support - Bankhall, the professional support services provider, has launched Mortgage & Protection Assist, a new compliance support service developed in partnership with the PMS Mortgage Club.


Regulation and legislation

Regulatory pressure on insurers pushed for change - Solvency II and other regulatory changes have put so much cost pressure on insurers that better solutions are needed to help them survive and continue to provide competitive products. This is the finding of the latest Swiss Re Sigma report.

Care Act on hold -When asked in job interviews, most people are happy to admit that they 'like a challenge' - even if that is just what they feel they are expected to say. However, creating an equitable standardised care system which is likely to have at least some impact on many of the 53m people across the length and breadth of England is a challenge that even the very brave may politely turn down. The government stepped up to this challenge by passing the Care Act in 2014, but having launched the first tranche of legislation, the second tranche - due in April 2016 - has been delayed. What does this mean in practice?


Product developments and innovation

iPipeline's protection quote tool integrates with LifeQuote -The integration allows advisers using iPipeline's SolutionBuilder seamlessly to access the LifeQuote platform and transfer cases to LifeQuote's outsourced case management team to handle the collection of the application data, case processing with insurers, and chasing of medical evidence.

Zurich pays out £103M in protection claims - A Zurich has paid out £103.6m in life, critical illness and income protection claims in the first half of 2016. More than 89 per cent of claims for critical illness were successful with the average payout amounting to £83,336.

Omnilife launches 'improved' group CI contract -Omnilife has launched an 'improved' group critical illness contract which covers conditions including cardiac arrest and terminal illness. The insurer said it decided to launch the product after 15% growth in the numbers of people covered in the group CI market in 2015.

First complete protection sales pass £1BN in first half of 2016 -First Complete has seen strong growth in protection sales, which increased by more than 30 per cent year on year in the first six months of 2016.

Old Mutual latest insurer to join UnderwriteMe -Old Mutual Wealth has joined the UnderwriteMe quote comparison service, providing advisers with online access to fully

LV= reports protection sales increase - LV= has reported that new business sales are up slightly at £146 million (H1 2015 £144 million) in its interim results for the six months ending 30 June 2016.

Cirencester Friendly unveils rider benefit for income protection contracts - Cirencester Friendly has launched 'My Extra Benefits' - a package of additional benefits for customers buying and holding Income Assured Plus and My Earnings Insurance income protection contracts.


Consumer trends

Advisers wary on L&G direct protection service -Advisers say a new protection comparison website run by Legal & General runs the risk of encouraging consumers to buy on price without advice. Comparecover sells life insurance directly to consumers from insurers including Zurich, Aviva, L&G and Beagle Street.

Young and middle aged adilts struggle to meet health recommendations -Some 88% of UK adults believe the NHS should prioritise life threatening conditions over common health issues according to Simplyhealth research. The research also suggested that the general public are not taking enough personal responsibility for their everyday health to help relieve future pressure on the NHS.

Baigrie Davies misinforms client about call recording-M Baigrie Davies must pay £100 for wrongly telling a client it had a recording of a call she said could back up her complaint about cover. A client, referred to as Mrs H, said that when she discussed a policy on the telephone with a representative of Baigrie Davies & Company Limited in March 2006 she was told it would run for the whole of her life. She has since discovered it actually has a 18-year term and took her complaint to the Financial Ombudsman Service.

Is shopping around best for PMI consumers? -The Health Insurance Group's Brett Hill warns that new FCA requiring general insurance and therefore private medical insurance customers to shop around, may not be best for everyone.


Experts corner

Business protection: manageing future risk thorugh financial advice -Richard Kateley explains how advisers can play an important role in protecting SMEs against future risks

An ideal model for protection commision -To grow the protection market we need an effective remuneration model to build meaningful distributor enterprise value. While the existing Lautro commission structure is recognised as flawed, we seem resigned to live with it. Necessary change should not require regulatory intervention and should be possible through effective self-regulation. If we were to change what structure should we adopt?

Why whole of life is a necessary talking point -Advisers should turn clients' attention to whole of cover, because like it or not, it is a necessary conversation, writes Justin Taurog.

Protection needs: how to help clients take control of day-to-day budgeting -The increasing number of price check services on offer may help to point clients in the direction of protection by saving them money in other areas, writes Kerry Nicolaides



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