Skandia is following the majority of protection providers by withdrawing from the pre-funded long term care market, citing a lack of interest from consumers, leaving the Pension Annuity Friendly Society as the sole provider of the product.
Skandia believes there is “uncertainty and confusion” among consumers over what is available and a misunderstanding that the state will provide care from cradle to the grave.
The last date for new business quotations from Skandia will be August 31. Existing Skandia Protect LTC customers and the conversion option from term and fixed term life policies are unaffected by the closure.
Protection brand manager Shelley Robertson says the Government needs to take responsibility for promoting LTC products. Robertson says: “If the Government admitted in black and white terms that state care is not guaranteed, they could lose an election because of the significant grey vote.”
PAFS business development manager, LTC, Graham Duffy says: “We are a small company and we do not need to write the large volumes of the bigger providers. As far as we are concerned, IFAs specialising in LTC say they need the product and we are committed to providing it.”
Nursing Homes Fees Agency adviser Paul Loom says: “This announcement comes as no surprise. Attitudes may change in the future when this generation has to sell their parents' homes to pay for their parents' care.”
Professional indemnity insurer Chubb Insurance has opened its books to new IFA business for the first time in a year.
Chubb, which is believed to have almost a quarter of the IFA PI market, is looking for a cross section of the IFA market all the way from small players to big nationals.
It has previously focused on what it describes as typical IFA business – life and pensions, investments and savings – but says it will accept more “exotic” business with a little more consideration.
The insurer closed its book to new business about a year ago as it did not want a massive share of the marketplace.
Chubb says it was finding it difficult to service its book as it was growing too quickly.
Normal constraints were not slowing down book growth and Chubb was finding that whatever it quoted it would get orders. It was concerned that if another misselling scandal hit the market, it could have trouble carrying it as an insurer.
But Chubb started writing new business three weeks ago and says the enquiries it has received so far are looking good.
Assistant vice-president Jonathan Kennett says: “We have started writing new business again and this is excellent news from our point of view. Although the PI market is still fairly limited, insurers are starting to feel that if they can accurately identify a risk profile they will compete for it. There are still not many players in the market but there is starting to be selective competition.”
Informed Choice managing director Nick Bamford says: “Chubb coming back into the market is very good news indeed. With a bit of luck, this will help to increase competition in the market and anything that can do this and help drive prices down must improve things for IFAs.”