Now is the time for protection insurers allowing intermediaries to use loaded premiums to end this practice, according to LifeSearch chairman Tom Baigrie.
Speaking at the advice firm’s Awards yesterday, Baigrie (pictured) maintained there is a desire among insurers to end loaded premiums but they dare not be the first to move due to risking losing market share.
Baigrie added that while no-one wants the Financial Conduct Authority to dictate policy in the market as it has in others of late and in each case to “devastating effect,” the protection sector is “crying out for leadership” from the leaders of those networks and intermediaries and their key supporting insurers who currently load premiums.
“There is already a trend I’m told downwards in loadings. They simply now need to voluntarily stop them all as in fact the regulator just asked you,” Baigrie said.
“Let me be clear. It’s not price control that’s needed. Premiums should rise and fall with the cost of risk and the cost of doing business.
“No, I’m talking here about premiums demanded by networks and brokers that are specifically inflated to pay more commission.
“A two tier market where those with scale demand they be allowed to overcharge their customers is an embarrassment that does not serve consumers. It rips them off.”
Baigrie told guests protection consumers need an honest market in protection.
“A market where all premiums fairly reflect the cost of risk and the cost of doing business leaving the achieving of better quality and more efficiency alone and able to improve outcomes for consumer, distributor and insurer alike,” he continued.
“And we urgently need those trading in loaded premiums to lead the change before the regulator gets fed up with our market.”
Winners of the LifeSearch awards were:
Best Income Protection Provider: LV=
Best Critical Illness Provider (sponsored by CIExpert): Guardian
Best Life Assurance Provider (sponsored by Comparethemarket): Legal & General
Best Business Protection Provider: Legal & General
Best Proposition Enhancement: AIG
Getting People Protected: Royal London
Keeping People Protected: Aviva
Exceptional Claims Support: Royal London
Extending Accessibility and Inclusivity (sponsored by MoneySuperMarket): The Exeter
Most Valued Player at an Insurer: Chloe Davies, Guardian
Outstanding Insurer (sponsored by Iress): Legal & General
Best Protection Innovation: MetLife
Best Use of Data and Tech to Refresh Protection: Swiss Re Reinsurance Solutions
Best Supporter in Powering LifeSearch to Break Barriers: SCOR
Bringing Protection to Underserved Audiences (sponsored by Teamspirit): Which?
Leading Light – Protecting People Properly: Alain Desmier
