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NU brings CI premiums down in line with rivals

Norwich Union is bringing critical-illness cover premiums into line with competitors only two months after its dramatic price increase.

Rivals made smaller increases and some even cut premiums, leaving NU out in the cold after its 40 per cent rise in premiums. It says sales fell after it increased premiums.

The U-turn means that combined term and CI premiums will fall by 19 per cent and mortgage term and CI premiums will come down by 13 per cent. NU also intends to cut standalone CI premiums in the near future.

Despite the cuts, it believes premiums are still set to rise over the longer term and predicts that the market will be volatile and issued in tranches, depending on the reinsurance contracts that providers can secure.

NU mortgage & protection marketing manager Keith Simm says: “It is difficult going in first but now the market has found its equilibrium. This is a competitive and a turbulent time for CI but feedback from reinsurers means that future premiums will have to go up.”

Whfis director Mike Stannard says: “It is reassuring to see NU coming back down but disappointing to see that they made the kneejerk reaction in the first place. It was a bit hastily done and poorly researched.”

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