The protection industry is not known for its public beatings. Sure, companies criticise one anot...
The protection industry is not known for its public beatings. Sure, companies criticise one another, but it rarely goes beyond friendly banter and hardly ever becomes personal. Last month, however, it became clear that the attack on Prudential was an exception to the rule after the sector branded recent research published by the provider as not only "bogus" but also "deeply flawed".
The study, which looked at declined protection insurance claims, has been heavily criticised for both relying on statistics that showed respondents had misunderstood the question, and for projecting the result onto the entire UK population, even though it surveyed just 2,065 people, with 39, at most, answering each question.
Commentators quickly branded the research as an "attack on the industry as a whole" after the findings suggested that, over the last five years, there was £43.9bn of rejected protection claims across Britain. To add insult to injury, the research also gave IFAs a good kicking by saying that buying protection through an adviser does not improve the claims experience.
While it is understandable that the insurer would want to market its Flexible Protection Plan, it is difficult to see why it would decide to publish something so deeply damaging for IFAs - the very people that it is relying on to sell its product - and the industry as a whole, including, of course, Prudential itself.
It is a bit like Freddie Ljungberg scoring for Spurs while still playing for Arsenal. If there was ever a public suicide in the protection industry this is it.
Since the launch of the new Pru product last summer, the response has been nothing but positive. So why should the product have to rely on "scaremongering" to sell? Is this an expression of how desperate the industry has become or was it simply a miscalculation by Prudential? The latter is probably nearer to the truth.
Johanna Gornitzki, editor
