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Pru bids to undercut rivals in loan protection sector before rebrand

Prudential is cutting premiums on its Scottish Amicable mortgage protection products in a bid to improve its market share before its rebrand next year.

It only entered the market 20 months ago, selling through IFAs and mortgage brokers. Market share in this sector is traditionally driven by price.

The Scottish Amicable name is set to die in January 2003 as it rebrands completely under the Prudential name.

The monthly premium for £75,000 life cover for a 30-year-old non-smoking man over 25 years would be cut from £6.25 to £5.84.

Pru claims this undercuts Friends Provident, Scottish Provident, Norwich Union and Legal & General, its main rivals in this market.

Prudential media relations manager Darragh Leeson says: “This is to enhance our market position and visibility ahead of the rebrand next year. Repricing the book is one way of helping the process.”

Cambourne Financial Planning director Mark Loydall says: “They obviously see it as a profitable market but if the housing market crashes, it could be very expensive in the future.

“Although it is a market largely driven by price, having an alliance with a lender is more important. Many more people who buy this product will know the Prudential brand than Scottish Amicable.”

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