Out of a possible 120 points, the Lifesearch analysis places Scottish Widows last in the 11horse race with 56 points, with Scottish Equitable second from bottom with 63 points and Standard Life on 70.
The analysis of the leading critical-illness insurance providers is aimed at helping consumers and intermediaries improve their understanding of the market.
Lifesearch rated the major providers on a set of 10 criteria, including type of rates offered (guaranteed or reviewable), conditions covered, quality of the provider's brand, service, communication, flexibility, quality of underwriting, and quantity of exclusions.
Leading the field in the report card is Abbey's Scottish Provident and Skandia Life with 92 points. Skandia topped the charts in a number of areas, being rated the best brand and unique selling proposition and best for flexibility.
Scottish Provident was rarely in top place in any individual category but maintained consistently high scores across all categories.
Abbey for Intermediaries head of life & health propositions Sue Wilkinson says: “This is such good news for everyone in the protection team.I am pleased that our ratings are consistently high across such a broad range of categories, highlighting just how important each of these aspects is in combining to make a successful proposition for IFAs.”
Scottish Widows was placed last for conditions, flexibility and exclusions and featured poorly in areas such as type of rates, brand and underwriting which means interesting challenges ahead for Nick Kirwan, who has resigned as head of marketing and product development at Abbey to join Widows as marketing director for protection. The reason for Kirwan's move is to help Widows become a major player in the marketplace but it also believes it is secure in its present offerings.
Scottish Widows senior protection marketing manager Rod McKie says: “Lifesearch has a particular view, as do any IFAs. We are presently increasing marketshare in the industry and many IFAs see us as value for money and feel our product is a good one.”
Kirwan disagrees with Widows' branding score but can see challenges ahead: “The brand speaks protection. I am joining Widows because I believe it has all the core ingredients to make it a solid player in the market.”
He admits that Widows would not be recruiting at such a high level if it did not recognise it had a problem but believes its corporate structure and backing makes it strong enough to turn around its proposition.
At the top end of the analysis results, Liverpool Victoria and 15-month-old Bright Grey were placed equal second. The report card shows Bright Grey's performance has been remarkable, quickly developing a brand and unique selling proposition, topping the charts in flexibility and communication and outflanking the competition in the underwriting stakes.
Lifesearch senior technical adviser Kevin Carr says Bright Grey has potentially the best underwriting team in the industry. “They have some of the most experienced minds in the industry but just as important is the fact that they are so approachable and helpful. Most providers hide their underwriters away, which is not conducive to good relations with IFAs,” he says.
Bright Grey chief executive David Robinson says: “We have made an impact from day one, which we are very proud of. It is extremely pleasing to be singled out as the only company to receive top marks for our underwriting approach. We believe we have brought a fresh approach to underwriting. We are flexible, honest, completely transparent and prepared to listen at all times.”
Scottish Equitable is placed second from bottom in the analysis and has taken considerable action over the past six months to turn itself around, lowering premiums and implementing online underwriting tracking for advisers. Its lowest scores came on brand and “poor” rates.
Aegon head of public affairs Scott White says: “Different IFAs are bound to have different opinions and experiences of different providers. These things are all very subjective. Lifesearch is evangelistic about guaranteed rates whereas ScotEq Protect offers five-year reviewable rates. On the other hand, we scored well in categories such as underwriting, children's cover and number of conditions covered.”
Carr comments: “We make it very clear that our ratings are not purely about the product but also about service, underwriting and pricing. If we had looked purely at the product then, no doubt, ScotProv, Skandia and Bupa would have won clearly but there are other issues that are important to consumers and intermediaries and poor service lets many providers down.”
He defends the ratings,saying because of the volume that Lifesearch deals with – around 55,000 clients on the books and 400 new policies written each week – the firm is well positioned to identify the strengths and weaknesses of providers.
“We believe the analysis clearly demonstrates the extent to which areas such as policy conditions, service and underwriting can vary in addition to just looking at price. However, wherever there are winners, there must also be losers and we hope that the findings will also give these providers a few hints on where to improve,” says Carr.
He adds that the results of the research have shown there is less differential between products now than ever before and most providers have moved towards the middle ground, making price and service more important than ever: “Intermediaries cannot recommend on anything else when the products in question are bordering on being identical. Providers need to differentiate more,” he says.
Breaking down how providers communicate with IFAs, Carr says one of the areas Lifesearch looked at was how much claims' information that providers supply to intermediaries. This is becoming increasingly important as after regulation they will need to demonstrate a good claims' record. “Here is a big wake-up call to every provider to issue simple, glossy but detailed claims' guides updated every year,” he says.
The report card shows that, apart from price, the market is far from stagnant, with plenty of choice between competitors. Carr believes there will be a lot of movement over the next few years.
As a parting shot to companies contemplating multi-tie deals in the protection sector, Carr says: “You would be mad. With so much movement in the protection market, you are doing your customers a disservice tying to just a few players.”
The full protection report card can be obtained through www.lifesearch.co.uk