Protection providers adjusted prices more times in July than in the entire second half of 2006, raising concerns that the industry is heading towards daily pricing.
Legal & General protection marketing director Alan Ferguson says this indicates the fierceness of competition in the market.
L&G had three reprices in July and LV= had two. However, Ferguson says many companies unofficially tweaked their rates during the month.
He says: “It is very tough out there. Some people who were not prepared to play the price game earlier are now going for it.”
Bright Grey product manager Roger Edwards says price competition is increasingly fierce and providers have the ability to react almost instantaneously if they are knocked out of their desired position.
Edwards says: “Petrol stations review their prices on an almost hourly basis and the protection industry is getting to a point where it has the sophistication and ability to respond almost instantaneously. Competition is so fierce that providers have to review prices on a very regular basis.”
Lifesearch head of protection strategy Kevin Carr says: “We are heading towards daily pricing. There is nothing wrong with that except it creates an awful lot of work for advisers.
“It is frustrating to have one price one day and another the next.”