The company attempted to convince LV= that veggies and fish-eaters are healthier and live longer therefore should receive cheaper rates but it seems its underwriter does not share its conviction about the health merits of vegetarianism.
Animal Friends legal director Chris Fairfax says: “We sent LV= actuarial research showing on average vegetarians live longer and get fewer critical illnesses than meat-eaters.
“LV= said if we could guarantee £500,000 of premium income they would look into reducing premiums but, as it is a new product, we couldn’t justify it so we decided to sacrifice our commission until we have demonstrated there is an interest.”
But LV= spokesperson Lucy Pope says: “It takes years of evidence to determine whether something results in a health benefit but we review our commercial terms regularly.”
So I suppose until an underwriter agrees there is less risk insuring a cabbage cruncher than a meatloaf muncher Animal Friends will be sacrificing its commission. You cannot say the company is not passionate about its cause although the recent publicity has helped soften the blow no doubt.
Meanwhile Nationwide pulled its loan and credit card payment protection insurance after its own mystery shopped revealed results it did not like. The mutual found that its salesforce was not adequately advising its customers and needed more training.
Industry bods speculated that the FSA, which is finishing off the third part of its two-year investigation into PPI and reportedly set to publish a PPI comparison table, might be about to get tough with the big players.
Loans.co.uk was fined £455,000 last October and Capital One was fined £175,000 in February for failing to treat customers fairly when selling PPI.
But the FSA declined to comment and a Nationwide spokesperson says: “The FSA has not asked us to withdraw these products. We do reviews fairly regularly and this issue has been highlighted.”