BIBA aims to restore payment protection insurance confidence
MORTGAGE SOLUTIONS - 6TH FEBRUARY 2007
The British Insurance Brokers’ Association says it is launching a series of payment protection insurance products with enhanced benefits and improved commissions to boost intermediary and consumer confidence in the market.
Payment protection insurance has come under attack from the Financial Services Authority (FSA) after research found many firms were not giving customers clear information during the sales conversation and were failing to establish the payment protection insurance policies they recommended were suitable.
The new loan, income and mortgage payment protection insurance products are actually being launched via BIBA’s scheme provider, British Insurance, and BIBA says they are designed to “offer greater benefits to consumers”, including partial cover on often-excluded stress, back-relate and pre-existing conditions, lower premiums and a removal of the AIDS exclusion.
BIBA claims compliance and marketing are the main hurdles for intermediaries selling payment protection insurance, so British Insurance will therefore be offering training and marketing support, such as brochures, web-links, telephone and email.
Eric Galbraith, chief executive of BIBA, says: “We can all see that the distribution landscape for payment protection insurance is changing as many existing providers continue to be challenged by the regulator and media to improve their sales processes, cover and cost. This recent attention has shaken consumer confidence in buying payment protection insurance from non-broker channels and the time is right for brokers to seize their market share.”
Kevin Carr, head of protection strategy at Lifesearch, says: “Any improvements in payment protection insurance are good for the consumer, but I still don’t believe that if consumers were told about income protection they would want to buy payment protection insurance. Payment protection insurance’s appeal is it simplicity but this doesn’t count for much when a claim arises.”
