Direct Life & Pensions sales and marketing director Richard Verdin says the ABI and CML review of ASU insurance is the biggest missed opportunity in the industry in the last 10 years Verdin says root and branch reform of payment protection is clearly needed but all the trade bodies have achieved has been to “dust off” ASU and conclude that it is serving consumer needs.
Writing in Money Marketing this week, Verdin suggests the common financial interest in the continuance of ASU sales for the CML and the ABI may have hampered their ability to review the product.
He says over three million new MPPI policies have been sold in the last four-and-a-half years but growth and maintenance of the policies has risen by only 986,000.
He says the only conclusion that can be drawn is that policyholders have allowed their policies to languish because of their dissatisfaction.
Under the Government's drive to promote sustainable home ownership, the trade bodies reviewed mortgage payment protection products, a market in which ASU dominates.
Verdin says: “The basic flaw is that ASU benefits can only be paid out for a maximum of 12 or 24 months. There is a clear mismatch between the product and the consu-mers' needs.”
ABI spokeswoman Emma Quantrill says: “The product was originally designed to cover the average time that someone would be off sick or made redundant for, which it continues to do.”