PruProtect calls for protection to be compulsory

PruProtect has called for protection insurance to be made compulsory and said it is already seeing signs of advisers switching to protection to anticipate the Retail Distribution Review (RDR).

The provider revealed it made a profit of £2.2m in the half year to June with a market share of around 7%.

Its range of products released this year is accounting for around 30% of new business requests, although this is predominantly through the whole of life (WoL) and accelerator plans.

Speaking at a media briefing to announce the results, Deepak Jobanputra, actuarial and product director at PruProtect, addressed the concept of simple products and suggested that, for the public's good, protection should be mandatory.

"What the market interprets as simple is around price and therefore cheaper," Jobanputra said.

"We focus on people's needs but what consumers are focused on is buying life cover as cheap as possible.

"Everyone needs critical illness not just life cover. Protection insurance should be compulsory."

Herschel Mayers, CEO of PruProtect, added: "I think we should lobby for that."

Jobanputra continued: "People are engineering these risks without understanding what the consequences are."

The call appears to contradict the ABI which has largely avoided pushing for most insurances to be compulsory.

Nick Kirwan, assistant director of health and protection at the ABI, told COVER that while there was a need for people to protect themselves, there were significant problems with making this mandatory.

"What do we do with people who are ineligible due to ill health," he said.

"And you need to think about what to do to people who don't do it? Are you criminalizing them?"

Kirwan also highlighted that the compulsory motor and employers liability insurances were largely to fulfill third party legal obligations.

Addressing the market post-RDR, the provider said it was "already seeing high net worth brokers entering into protection" in preparation.