Chesnara’s acquisition of HSBC Life UK could pose a “real loss” for the protection industry – particularly if instant underwriting decisions disappear.
This is according to advisers Health & Protection spoke to following last week’s news that Chesnara had entered into an agreement to acquire HSBC Life (UK) Ltd for £260m.
Completion is expected in early 2026, subject to customary regulatory approvals.
Instant underwriting decisions
Marta Scott-Manuszewska, director at Five Star Mortgages, explained that a key benefit of HSBC Life’s offering is its instant underwriting decisions.
“As soon as they get into medical reports, it’s going to be difficult,” Scott-Manuszewska continued.
“It’s the point of what HSBC stands for. Two things I love HSBC for is they’ve got instant decisions, so they don’t do medical reports, so it doesn’t drag on – it’s either yes or no or loading.
“That’s what I love about HSBC.
“Whoever takes over, if they say we’re going to medical underwriting and send out for a nurse report or a GP report, what’s the point? I don’t want another insurance company that does that. It’s going to be a nightmare.”
Added value services
But Scott-Manuszewska added there were other parts of HSBC Life’s proposition she hoped Chesnara will retain.
“They’ve got really good added value services,” Scott-Manuszewska continued. “They’ve got a really good service, but who knows?
“The whole philosophy of HSBC was that they are going to give you a decision – that’s what made them different.
“That’s what the advisers and some clients want. They want a decision.”
Real loss
Joanna Streames, managing director at Velvet, told Health & Protection the loss of HSBC Life was a “real loss” to the protection industry.
“While banks aren’t always the most competitive on pricing and can’t offer full advice, there is still a significant group of customers who feel more comfortable buying life and critical illness cover in person, via their bank,” Streames said.
“For those individuals, HSBC was a trusted route into protection.
“Losing a major high-street name like HSBC risks widening the protection gap. It reduces both visibility and accessibility for customers who might never otherwise consider cover unless prompted during a financial review with their bank.”
Interesting move
And Alan Lakey, director at Highclere Financial Services and CIExpert, called the acquisition an “interesting move”.
“Chesnara clearly sees value in the protection arena and has the capital to spearhead further growth,” Lakey said.
“HSBC has gradually been developing its protection plans and I know that its intention is to become a major player.
“The current critical illness strategy is to operate a comprehensive and a budget plan to satisfy both types of client and the comprehensive plan is of a very high quality,” Lakey continued.
“I would hope and anticipate that they continue down this dual path – enhancing the quality yet retaining a lower cost plan for those unable or unwilling to pay a bit more for the wider ranging cover.”