2007 has been an indifferent year for the UK protection industry. To a some extent the malaise has been the cause and effect of the price war, but the influences of ‘higher beings’ have also played a part.
To start with, HMRC pulled the rug from under the feet of pension term assurance. Sadly, the many millions of pounds spent by insurers developing propositions was ultimately wasted money. If only that money been spent on reinventing income protection insurance!
As the protection industry adopted the ABI’s statement of best practice for critical illness insurance the Financial Ombudsman Service chose to have a pop at the industry. In an interview broadcast on BBC Watchdog on 11th April, Chief Ombudsman, Walter Merricks, said, “On the figures we’ve got it appears that one in five of the people who’ve got CI insurance policies may have policies that are actually invalid.” I’m not sure what figures he’s got but he could be correct if people claim for things that aren’t covered or failed in their duty of disclosure. Perhaps the FOS believes that the best way to avoid complaints is to create an environment where people don’t buy products in the first place!
