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Public face postcode lottery on protection

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&#39

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.”


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