Group critical-illness and inc-ome protection policyholders face a
postcode lottery on the cost of premiums, according to research from the
Office for National Statistics charting disease patterns in various regions
of the UK.
The ONS figures reveal higher levels of heart disease in South Wales,
Scotland, Tyneside and Northern Ireland which could lead to higher premiums
for group schemes based in those areas.
Aegon says it is an industry standard to take into account the region
where policyholders at the group level live. However, several rivals say
they do not look at where someone resides.
Swiss Re, the underwriter responsible for the majority of life offices'
policies agrees with Aegon, saying the location of a policyholder comes
into consideration at the group level but not the individual.
Swiss Re says a scale exists with residents of the South-east and
South-west facing the lowest premiums and people in Northern Ireland and
Glasgow being hit with the highest costs. But life offices such as
protection market leader Scottish Provident, Skandia, Standard Life, CIS
and Liverpool Victoria say they never take the location of someone into
The ABI says it is not aware of any industry standard for underwriting of
CI or IP policies.
Aegon head of underwriting Matt Rann says: “Certainly, geographic location
is taken into account for group policies. It is a market norm. All
reinsurers will quote differential rates depending on where policyholders
Swiss RE group risk manager Ken Richart says: “All major players
differentiate their rates as far as where the scheme is located when it
comes to group critical-illness or group income protection.”
Scottish Provident PR manager Christine McAllister says: “It makes
absolutely no difference where someone lives in the UK when it comes to
critical illness or income protection.”