Industry: Standard Life makes its third adjustment to price range this year
Standard Life has reduced its rates for the third time this year. Following its latest review, the life office decided to adjust its prices for all new customers buying both single life and joint life products. The new rates became available on 29 March.
Standard Life's move came only one week after Legal & General made its second rate change in 2005. This has prompted speculation that the protection market is undergoing a rate war.
"We've been expecting a tug of war over prices for some time as life offices continue to realise that protection is one of the few areas of financial services where they can still make a profit," said Linda Tyson, policy adviser at LifeSearch.
Tyson added that the battle to be the most competitively priced provider is no surprise and stressed that the trend towards rate cuts is likely to continue. "The quickest way for large insurers to win market share and get a foothold in the market is to cut rates," she said.
Standard Life's latest rate review was the provider's third since the firm's decision to re-launch its protection products, with new competitive rates, in January. Its second rate change came at the end of February.
Commenting on the latest review, Mick James, marketing manager for protection at Standard Life, said: "This change is part of a continual build up of our brand presence in the market and seeks to build on our success at maintaining service standards through the first quarter of 2005. We are watching the market actively to ensure we remain competitive in our chosen target sectors," he said.
Legal & General has so far slashed its term assurance rates twice this year. However, Bernie Hickman, protection development director for the provider, argued that this is not an unusual move.
"We regularly review our premium rates to reflect changes in the cost of providing the cover and in order to maintain competitively priced term assurance. Whatever other providers do, we are confident we have the scale and ability to sustain our competitive prices and market leading position," he said.
Scottish Equitable Protect also decreased its term assurance rates on 22 March, while Norwich Union has announced that reduced rates for its term assurance without integrated critical illness (CI), term assurance with integrated guaranteed CI and mortgage life assurance with integrated guaranteed CI will come into effect on 6 April.
