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ScotProv raises CI rates again

Protection specialist Scottish Provident is raising its critical-illness cover rates for the second time in three months with premiums going up by as much as 25 per cent from next week.

The hike follows a “major increase” in December which saw all of the company&#39s CI rates go up by an average of 25 per cent. This time, only its combined term and CI rates are affected.

Policies with a five-year guaranteed rate will see increases of 8 per cent while those with a 15-year guarantee will go up by 25 per cent.

The move comes only a week after Norwich Union cut its CI rates after hiking them by 40 per cent in December. It cut combined term and CI by 19 per cent and mortgage term and CI by 13 per cent.

Providers say the dramatic fluctuation in rates is likely to continue as the market strives to come to terms with reinsurers charging more or stopping underwriting guarantees on CI policies.

ScotProv head of marketing and product development Nick Kirwan says: “It is more of a finessing this time around. I am not ruling out further changes, the market is still settling down.”

Portfolio Insurance Consultancy principal Brian Lentz says: “It is purely the guaranteed premium issue which is pushing rates up. I have been saying for some time that CI rates are quite low as compared to their risk, so I am not that worried about these price increases.”

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