The right payment protection insurance products are in the wrong hands
MORTGAGE DISTRIBUTOR - 1ST DECEMBER 2007
Following the publication of the Competition Commission’s Emerging Thinking document on payment protection insurance, I’m delighted to find the integrity of the insurance industry and intermediaries remains intact. We’ve been given a clean bill of health.
For years I’ve maintained that product itself is sound (apart from single premium cover) and when sold properly will provide a safety net and peace of mind for those who are unable to continue with their loan and credit repayments.
The commission’s feedback offers no new radical insights. However, it is the most comprehensive investigation of the market so far, despite delaying tactics from some parties who have been unable to retrieve information for their databases or provide data in the format required.
I believe the right products are in the wrong hands, and this view will, in time, be borne out by further commission research. All the issues raised by consumers such as lack of pre-purchase information, confusion over jargon and uncertainty over policy cover can be addressed by independent payment protection insurance providers.
The most interesting area for investigation is whether distributors’ payment protection insurance profits prop up losses made at credit product level. Given the current credit crunch, let’s hope the commission’s concern are unfounded – otherwise the ramifications will be huge.
Simon Burgess
Managing director
British Insurance.
