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After all this talk of innovation, finally there is a bit going on

LV= is developing a simplified income protection product which it plans to launch by the end of the year. The product borrows elements from payment protection insurance, such as its simplicity and speedy processing, and is specifically targeted at mortgage advisers.

Swiss Re’s Term and Health Watch 2007 report shows mortgage advisers are becoming increasingly reluctant to write protection business because application processes are too onerous but brokers will be able to explain and submit the application for LV=’s new income protection plan in 10 minutes.

Head of intermediary marketing strategy Justin Harper says the company is working with mortgage advisers in developing the product.

He says: “The product will combine the simplicity of the PPI sales process with the value and longevity of income protection. We believe and brokers believe this is a great opportunity for more protection to be sold, providing the product and process meet their needs.”

Friends Provident now pays out a proportion of critical illness claims which would otherwise have been turned down due to unrelated non-disclosure.

If the undisclosed information would not have changed the customer’s premiums had it been detailed at the outset the full sum assured will be paid but if, for example, the policyholder had been paying premiums of £40 but the non-disclosed information would have increased premiums to £80 Friends Prov will pay out 50 per cent of the sum assured.

Protection and actuarial manager Mark Jones says: “Friends Provident is in the protection business to pay valid claims, to be able to do that we rely on the customer to provide us with all the information we need.

“Where we have found the non-disclosure to be a genuine oversight we will now make an offer based on a proportion of the total claim.”

Other providers have come out saying they also pay out a proportion of unrelated non-disclosure claims, on a case-by-case basis, but most have still welcomed Friends Prov’s move to make this formal and claim it will boost consumer confidence.

But Britain’s flood defences may need a little innovation.

Insurance companies say the revelation that just over half of Britain’s flood defence systems are in good condition could result in hundreds of thousands of homes not being offered cover.

The true state of the country’s flood defences was revealed in a damning National Audit Report recently and Royal & Sun Alliance property development manager Alan Gairns says that, had this information been known from the start, cover may not have been offered or premiums may have been more expensive for some households.

Gairns says: “If the defences did not provide the level of protection we thought it could have influenced a change in premiums or whether the risk is deemed acceptable. We need to know the level of protection that is being provided. We could be looking at something thinking it is low risk but in actual fact the defences in that area may not stand up.”

The Association of British Insurers expects the cost of the floods to rise to £1.5bn. I hope you live on a hill.

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