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The Royal wedding is off

It is August and although it is still unseasonably miserable outside the protection industry has somewhat ground to a halt, which I hear is the norm at this time of year.

The big news in the last week was the scuppering of the Royal London Royal Liver merger talks. The royal wedding is off people.

The companies said in a joint statement last Wednesday: “After careful thought and thorough consideration the board of Royal Liver has concluded that although the proposal from Royal London had considerable merits for its members those interests will be better served by pursuing an independent strategy.”

Some industry players were surprised Royal Liver rejected the offer claiming the mutual, which has over one million with-profits policies on the books, needs to do something to ensure it keeps afloat.

But the company insists it has a plan and claims Progress, its protection arm, and Park Row, its intermediary proposition, have brought the 157 year old mutual into the 21st century and are doing well. I suppose Royal Liver’s interim results, which are released next month, will speak for themselves.

August has been slow but it seems July was quite the opposite, particularly with provider repricings. In fact Legal & General protection marketing director Alan Ferguson claims there were more product reprices and price adjustments in July than the entire second half of last year.

This has raised concerns that the industry is moving towards daily pricing as the price competition or, dare I say it, war intensifies.

Bright Grey product manager Roger Edwards says: “Petrol stations review their prices on an almost hourly basis and the protection industry is getting to a point where it has the sophistication and ability to respond almost instantaneously. Competition is so fierce that providers have to review prices on a very regular basis.”

Lifesearch head of protection Kevin Carr says: “There is nothing wrong with daily pricing except it creates an awful lot of work for advisers. It’s frustrating to have one price one day and another the next.”

Meanwhile Carr’s campaign, for providers to retrospectively apply any critical illness conditions they added when implementing the ABI standard definitions to all existing policies, may be paying off.

Norwich Union, the second largest player in the market, has allowed all its existing critical illness policyholders to claim for its new condition, traumatic head injury.

NU says it feels like the right thing to do but will other providers follow suit?


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