Royal London chief executive Phil Loney believes banks and rival providers are ripping off life assurance customers and plans to address the problem head-on when the insurer launches a simplified protection proposition later this year.
On Saturday the mutual will launch its first TV advertising campaign for over 10 years ahead of a drive into the direct-to-consumer market.
Loney says Royal London is looking to shake-up the protection market and claims existing providers are offering “appalling” value for money.
He says: “We are looking at developing very simple products in markets that exist at the moment but are giving people lousy value.
“The primary focus in D2C is the over 50s cash plan market. The value for money for customers and the fairness in that market is appalling.
“At the moment the cost of cover is very high because the providers are making very big margins. Secondly, you can go on contributing into some of these products for 40 years and over contribute way beyond the benefit you are going to get out. That doesn’t seem fair.
“Likewise you can contribute for 30 years but as soon as you stop making payments you lose everything. That doesn’t seem fair either.
“We will be entering with a product that is designed to address those issues. We will be operating at much lower margins than the shareholder-owned companies do and we will be offering a much better customer proposition.”
Loney insists Royal London’s D2C push will not dilute the provider’s adviser proposition.
“If you could see my business plans you would understand why advisers are so important to us,” he says.
“No matter how far into the future you go our adviser business will always be much bigger than our D2C business.”