Norwich Union (NU) is the first provider to increase guaranteed rate premiums for critical illness (...
Norwich Union (NU) is the first provider to increase guaranteed rate premiums for critical illness (CI) cover. The provider has inflated prices for new polices by 40% and it is expected the rest of the market will soon follow suit.
The move from NU comes as no surprise to the industry, as speculation has been mounting over the past year that current guarantees are unsustainable at their current level. Advances in medical science coupled with policies maturing means providers are bracing them-selves for an imminent claims explosion.
This has led reinsurers to make price hikes, with Swiss Re turning its back on CI guarantees altogether.
NU's price increase will affect standalone CI policies, mort- gage life insurance with CI and term assurance policies with CI. Rates for existing policies will remain unaffected.
Keith Simm, protection manager at NU, said: 'We believe this is a move which will be followed by other providers.'
