CETA calls on insurers to re-establish value of MPPI

The insurance industry has a golden opportunity to reposition mortgage payment protection insurance as a valuable product, claims general insurance network CETA.

With unemployment on the rise CETA says the time is right for insurers to repair the tarnished reputation of MPPI, following mis-selling scandals involving banks and building societies.

But David Quick, managing director of CETA, also warns the public benefit of MPPI will be lost if providers continue to raise premiums in line with the number of claims.

He says: “Insurers’ response is understandable as they can’t keep premiums artificially low while claims costs escalate.

“But it would benefit the industry’s image for them to make underwriting margins as lean and mean as possible.

“They could also give some recognition to those who took out cover before the recession started, rather than apply across the board increases to old and new customers alike.”

Quick adds: “One encouraging sign is that there has been little evidence of insurers turning home owners away.

“I suspect that MPPI will increasingly prove a lifeline to many households so it’s important that the industry doesn’t emulate the banks and let down customers just when their need is greatest.”