But is the industry surprised? It would appear not.
Price has long been a hot potato in the protection sphere. Last year Bright Grey product director Roger Edwards was reported in Money Marketing as saying the industry is overly obsessed with price, while Friends Provident head of protection Mark Jones warned that if it becomes the most prominent factor in the marketplace, then “something will have to give”.
But while price is a crucial factor when selling protection plans, the quality of the product should be considered first, says Master Adviser IFA Roy Mcloughin.
Unleash Advice Partnership IFA Adrian Kidd says claims history is also worth considering.
Kidd says: “I would agree and say price is a major factor but also I look at claims history also. I try to make clients aware that price should not be the deciding factor although I would say 60 per cent of mine still lean that way.”
Highclere Financial Services partner Alan Lakey says price is important but is secondary to the overall quality of the plan.
He says: “Any sensible adviser will start from the premise of ‘will this provide the desired outcome for my client?”
However, providers are at odds over the importance of price.
Aviva director of protection Richard Verdin says: “These results support the long held view that, for pure protection contracts, where there is an absence of any significant service or product feature, then price is the determinate for advice – which instinctively feels appropriate to me.”
But Fortis managing director Martin Werth says while price is always important, it can be too simple a measure. He points out that often the difference between first and third place in best buy tables is under 50p per month, therefore advisers should look more carefully at differences in benefits, underwriting philosophies and service.
Similarly, Royal Liver IFA marketing manager Aidan Dewhurst, the head of online protection arm Progress, says it’s easy to see why price is at the top of this list, but it doesn’t necessarily tell the whole story.
He says: “It is often the secondary considerations like underwriting, service and features and benefits that end up making the difference to a client.”
Of those surveyed, 53 per cent regarded underwriting capabilities as the second most important factor, while 39 per cent said product terms and conditions were third most important. A further 38 per cent said a firms financial strength is fourth most vital, with 31 per cent placing service in fifth.
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