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Protection push could be funded by product levy

Scor Global Life UK head of business development Roy Chappell suggests the Consumer Protection and Insurance Engagement Campaign could be funded by a levy imposed on all protection products.

Money Marketing revealed last month that the campaign is planning a £5m marketing push to promote the need for protection, pending the approval of the 22 insurers and reinsurers backing the initiative.

Campaign chairman and Lifesearch managing director Tom Baigrie says the group hopes to inject a further £2m in its second year.

Chappell says Scor is considering the budget proposals but says a levy on products is one potential solution for securing long-term funding. He says: “The way to get the campaign sustainable long-term funding is to do it through some type of marketing levy. Maybe a 0.5 per cent surcharge on all products sold by the industry. Once a levy is agreed, there is this long-term sustainability and you then avoid this bun fight of annual allocation of funds.”

Members have until October 30 to decide whether to support the £5m proposal, with the first instalment of funding due at the end of October.

Chappell says it may be difficult for the campaign group to decide how much each member firm should pay towards the total cost of the initiative.

He says: “At this point, it is difficult because however you propose it, there will be winners and losers. Some companies might offer the full product range and some companies will not want to subsidise other companies that are not part of the campaign.”

A Legal & General spokes-man says the current budget proposal will make anyone “swallow hard in this environment” but adds: “A levy would be biased towards those who sell the most protection. We would be paying a greater percentage than most.”

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  1. The current proposal is doomed to failure as far as i can see. Tom Baigrie has done a fantastic job in setting out the issues. However as far as I can see the distributors are not involved. There is over £1.0b paid out in commission annually. A small levy on this coupled with other support would more thna cover the costs as you have indicated on your paper

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