View more on these topics

Protection price cuts set to peter out after impetus from cash boost

The recent spate of price cuts in the protection industry is due to a technical issue and will “fizzle out” in the next couple of months, claims Legal & General.

The firm’s protection marketing director Alan Ferguson says that the extra margins which have been available to product providers since the FSA relaxed solvency requirements in January have allowed even traditionally less competitive insurers to introduce keener pricing on their protection products.

But Ferguson says protection prices are now set to stabilise because the extra capital generated by the regulatory changes will be used up and providers will be reluctant to cut into their original margins by dropping their prices further.

He says: “Weaker demand for protection resulting from, among other things, lower mortgage volumes, has encouraged product providers to spend some or all of the extra margin available to them from reserve requirement changes earlier in the year on reducing premiums to drive sales and market share.

“I believe that the recent bout of price-cutting action is likely to fizzle out this autumn as most providers are likely to have now factored these changes into their premiums.”

Aegon Scottish Equitable head of individual protection marketing Rod McKie says: “The change in the solvency requirement has helped protection providers and that benefit has been passed on to the customer.”


Former Pension Commissioner Drake appointed to PADA

Former Pensions Commission commissioner Jeannie Drake has been appointed non-executive director of the Personal Accounts Delivery Authority from September 17. She will be working alongside Paul Myners who was recently appointed chairman of PADA which will be responsible for getting personal accounts up and running and for ensuring employers meet their new obligations. Drake currently […]

Axa takes over ICAS International

Axa UK has bought ICAS International Holdings, a global provider of employee support and well-being services.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm