Prudential: Plans to introduce vitality points system to protection business
By Lucy Quinton
Drastic lifestyle changes could soon mean lower protection premiums for policyholders.
The news came after Prudential revealed it intends to adopt the vitality points it uses on the health side in to its protection business.
Angus Maciver, UK insurance business director at Prudential, said: "It will be launched later on in the year in the third quarter".
The launch is set to ensure that policyholders will be able to obtain discounts on its Flexible Protection Plan (FPP).
Dale Tranter, research product developer at Sesame, said Prudential's move was a logical one and that "given the PruHealth products and FPP are going to be manufactured by the same company, it makes sense to extend the vitality points concept to mainstream protection contracts."
He added: "Obviously systems for calculating and implementing these discounts will be in place already. Affinity points schemes are sometimes a bit of a gimmick but anything that delivers savings in hard cash has to be worthwhile for the client."
Richard Verdin, sales and marketing director at Direct Life & Pension Services, said the concept was great but questioned how it would be implemented. "This involves a huge amount of trust. As there are so many people in the market – how will it be policed?" he asked.
However, Mick James, marketing manager at Standard Life, was positive about the launch. "This is really interesting and a useful product development," he said. PruHealth sales have shown that there are customers out there that appreciate such an idea in the market and it has clearly worked for Discovery in South Africa too, he added.
"It all looks positive and it will be interesting to see how much discount will be available and what the impact on price will be – will it be useful and relevant?" James said, adding that the concept would engage the customer for a long time, which is a good thing as there is a high track record of lapses in the UK.
"It's tricky but I have to applaud this innovation," James said. He added that there were no plans as yet for Standard Life to do a similar thing but that it was looking at other areas of the market and hoped to launch something in the next three to four months.
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