It is never quiet on the critical illness (CI) front for long ' at least in recent months. First we...
It is never quiet on the critical illness (CI) front for long ' at least in recent months. First we had the ABI changing standard definitions of some of the policy's key conditions, swiftly followed by reinsurers pulling out of the guaranteed market, which has in turn led insurers across the board to implement price hikes.
For many brokers, Prudential's decision to keep guaranteed rates at their original level has been a lifeline in a very tempestuous sea. As the rest of the market increased their guaranteed rates to differing levels, Prudential's CI planstood firm and quickly became a popular and confident recommendation for many advisers. However, it seems that Prudential could hold out no longer and has advised intermediaries that its rates are increasing with immediate effect.
Brokers expected the insurer to align premiums with the rest of the market eventually. But it is how Prudential has implemented the change that has caused outrage among so many advisers. It is not just future clients that will miss out on affordable cover ' the insurer is, at present, refusing to honour all applications currently awaiting processing.
From the adviser's perspective this is not just an administrative headache, but also a clear knock to the confidence of their clients and adviser when they have to break the news and backtrack their decision. From the industry's perspective, this also does nothing to lift the cynical view many people have of life assurers. It is interesting to see how a company sitting so high in the popularity stakes can fall so low in a matter of days ' not because of what they have done, but how they have gone about it.
Kirstie Redford, editor
