Industry: Life Policies Direct research shows NU is failing on delivery times
Norwich Union has again been rocked by allegations of poor service after research revealed that the provider takes an average of 40 days to underwrite its life assurance and critical illness policies. This, on average, is more than three times longer than it takes Friends Provident to turn around an application.
The latest findings by Life Policies Direct, which assessed the average time it took providers to issue acceptance terms for an application, showed that of the 10 insurers investigated, Norwich Union came bottom, taking more than a month to underwrite a policy. Friends Provident was ranked the top performer, taking on average 11 days to see an application through.
In second place came Scottish Equitable, closely followed by Royal Liver, with an average of 19 and 20 days respectively.
However, performances by Axa Sun Life and Standard Life were only slightly better than Norwich Union's, with Axa Sun Life taking 36 days to underwrite a policy and Standard Life taking 34 days.
Jason King, managing director of Life Policies Direct, said: "The facts speak for themselves. Norwich Union has got some big problems with its service.
"I accept that a provider's ability to process new business applications can vary according to short-term fluctuations in new business volumes, however Norwich Union is an established and significant provider in the life insurance market and should have sufficient resources and systems to cope with the business volume it is attracting."
James Evans, head of media relations at Norwich Union, admitted that the firm has had some "unacceptable" delays.
"We certainly experienced some delays during the summer and the underwriting process was taking considerably longer than we wanted, for a number of reasons, with many advisers saying that our systems were too complex. We have now started to listen to intermediaries and are trying to make our systems both quicker and easier to use," Evans said.
King said that lengthy underwriting processes could disadvantage advisers. "IFAs generally do not get paid their commission until a policy starts, so there is a cashflow implication for IFAs dealing with some providers.
"Advisers also spend a considerable amount of time and resources trying to push new applications through the process. Providers who take longer than others to process new business are therefore a considerable cost to the IFA industry," he added.
The research looked at 2,200 applications submitted between 1 May 2005, and 31 July 2005.