We saw a lot of changes to critical illness (CI) products last year. Do you think these changes presented a meaningful difference, or was it a case of change for change's sake?
Ian Jefferies, Skandia
A lot of the activity we have seen with provider upgrades is driven out of the very competitive nature of the market.
If you take what’s happened to the market over the past seven or eight years, there are some really positive signs. In 2007, the claims paid out rate from the ABI data was 84%, whereas by 2012, the pay-out rate increased to 91% on average.
One of the consequences of the market being so competitive is it wasn’t just a case of insurers adding more conditions onto their existing plans. A large number of insurers would have reduced their prices.
Last year as a consequence, we would have seen new business rates falling but more cover upgrades and enhancements. Overall, I’m seeing a positive picture on how the CI market is moving.
For us at Skandia it’s not about adding more conditions for the sake of it. I know a number of companies who have looked at a number of the definitions set at the ABI+ level. We’ve not just seen more conditions being added, but a move to more of the definitions set at that higher standard.
Providers are improving quality of cover and wanting to make it easier for customers to claim.
I’d also like to see more providers offering CI cover buy-back. The chances of a customer having a second stroke or a second cancer are high I’d like to see the industry think this about in addition to re-pricing, definitions and cover upgrades.
Phil Jeynes, Pru Protect
The changes we made last year were a big step forward in terms of our Serious Illness Cover offering. We now are the only insurer that would pay out for all heart attacks and strokes regardless of severity, and more cancers than any other insurer. We and the advisers we deal with feel those changes were worth making and present value for money for consumers.
Almost everything we do is based on feedback from the brokers that use us. What brokers have been telling us consistently since we launched, is that they like our proposition but would like it to be even broader.
If we’re covering certain types of heart attack or stroke, why not cover all? The biggest thing for us is to make our products as all-encompassing as possible and as transparent as possible.
Take heart attack, for instance. Customers just don’t understand that heart attack covers a multitude of different conditions.
They think if they’ve been diagnosed with having suffered a heart attack, regardless of severity, and they have a policy that clearly says it covers heart attacks, they think they’re going to be covered.
We have always tried to make sure our policies meet customer expectations. Any changes we make are with these in mind.
With the new change we introduced there is no wording about troponin levels or portion of heart muscle or raised ECG levels. It just says if you’ve suffered a heart attack, we will pay. We think that was a change worth making.
