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Critical war switches to ABI+ battle

The race among insurers to offer the biggest number of critical-illness conditions has been replaced by increasing competition to offer the most ABI+ definitions, according to Defaqto.

The Association of British Insurers’ statement of best practice for CI cover aims to provide clarity with industry definitions for illnesses frequently covered by policies. Where providers include definitions that are more inclusive than the industry standard, this is known as an ABI+ definition.

Defaqto insight analyst for life and protection Ben Heffer says: “It is a good thing that insurers are introducing generous definitions but it is a double-edged sword because then you are introducing the variety again.”

Heffer says insurers were effectively brought into line by the statement of best practice but are now reducing policy clarity again as they start to offer things above the industry standard.

He adds: “The conditions’ race has died a death, but it has now turned into a kind of ABI+ race. The emphasis has changed.”

Highclere Financial Services partner Alan Lakey says: “Many insurers produce marketing material showing how many more ABI+ definitions they have than their competitors.”

But he believes the conditions’ race is still going on, with firms continuing to add to their lists.

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  1. Eventually ABI+ will have to become the new ABI. The spiral continues with an ever more complex product that few fully understand and one that strays further and further from its name “Critical Illness”….

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