Round-up from LifeSearch
Since the last bulletin the following life insurance offices have announced rate changes: Legal & General, Norwich Union, Bright Grey.
As reported in Money Marketing, LifeSearch met with the FSA in December to discuss our concerns regarding the sale of non-advised life insurance protection policies. The FSA confirm they understand the issues, which will be considered alongside their overall ICOB effectiveness review which will begin in April 2006.
Our third annual life assurance protection awards will take place on Wednesday February 22nd – see below for the shortlists as voted for by LifeSearch staff.
Comments of the week
In the present financial year to date, only around 20% of all cases against IFAs were upheld. So in 4 out of 5 cases involving Independent Financial Advisers we found in favour of the firm. In contrast the uphold rate for other sectors was over 30%. Put another way, out of every 100 cases from all sources coming to the Ombudsman we find in favour of the complainant in only about 30 of them; and only 3 of those cases will concern Independent Financial Advisers. This statistic is the more remarkable in the context of the amount of business conducted by IFA firms. For mortgage endowments – the subject matter of two thirds of our cases – the picture is even clearer. Here we uphold over 40% of the complaints raised against providers and lenders. For IFAs the rate of upheld cases is less than half that.’
Sir Christopher Kelly
Chairman, Financial Ombudsman Service
‘Virgin are playing with words here. Yes, of course you can complain to them and FOS. Will it do you any good? No. You’ve bought a critical illness policy direct without taking advice so the fact that the policy is unsuitable is entirely your fault. The FOS are not in a position to offer financial redress. There is a support procedure for mis-selling, but not one for mis-buying. This is one of the main points of the Money Marketing campaign and it’s extremely daft of Virgin to draw attention to their failings.’
Mark Locke
PR Manager, Scottish Equitable Protect
LifeSearch www.lifesearch.co.uk provide life insurance in the UK.
Villain of the week
Virgin Money
Not for the launch of an innovative new product, but for the misleading consumer marketing and communications that surround it. It seems to us that Virgin are keen to compare their product with critical illness cover on price when it suits them, but are quick to say it is not critical illness when advisers point out the product’s limitations by comparison. It is cheaper for a reason after all, and consumers must be careful to compare the important and complex small print before buying, as when there is no advice they alone are fully responsible for their buying decision.
To tell your customers that they can complain to the Ombudsman about the suitability of a product when it is sold only without advice, with the knowledgethat the Ombudsman cannot help in the main area where claims have historically arisen, is both misleading and wrong. This practice is used by huge and trusted high street brands and causes consumers to unwittingly forfeit regulatory protection. Many people know and trust the Virgin brand and we fear that what might well result is that many consumers will be persuaded by clever marketing to buy a product that is unsuitable and inadequate to protect the risks they really need to cover, while thinking they have done the job properly. Isn’t this what regulation was designed to prevent?
Hero of the week
Norwich Union
This may surprise some readers, however, we feel Norwich Union have taken several steps forward in recent months including publishing critical illness claims stats, launching an e-bulletin, introducing double life insurance cover during underwriting and all while improving the service they provide to intermediaries. What more can we say other than credit where credit is due – and please keep it up!
On the subject of publishing critical illness claim stats we will be compiling a comparison table of all the stats published so far, which will be available soon. Please contact us in the coming weeks if you have any new information or plan to update your stats soon.
In the meantime we continue to call for life offices to make sure their statistics are in a format that can easily be used with consumers.
LifeSearch Protection Awards 2006 – The Shortlists
Best Life Insurance Service Provider
Friends Provident, Legal & General, Bright Grey
Most Improved Life Insurance Provider
Royal Liver, Norwich Union, Bright Grey
Best Critical Illness Provider
BUPA, Friends Provident, AXA
Best Income Protection Provider
Friends Provident, Liverpool Victoria, Pioneer
Best New Life Assurance Initiative
Legal & General, Friends Provident, Royal Liver
Best Life Assurance Underwriting Team
Royal Liver, Friends Provident, Legal & General
Best Life Insurance E-commerce Provider
Friends Provident, Legal & General, Royal Liver
Best Life Insurance Press Office
Peter Timberlake – Standard Life, Mark Locke – Scottish Equitable, Paula Sutherland – Scottish Widows
Best Trade Publication for Life Insurance and Protection (In association with Scottish Equitable Protect)
No shortlist (Note, voting for this award included all recipients of this bulletin)
Best Overall Life Insurance Provider (In association with The Exchange)
Royal Liver, Legal & General, Friends Provident