View more on these topics

New cover products can fill the PPI gap

JAMES WATSON, SALES AND MARKETING DIRECTOR, PAYMENTSHIELD
JAMES WATSON, SALES AND MARKETING DIRECTOR, PAYMENTSHIELD

Lloyds Banking Group’s withdrawal from the sale of payment protection insurance suggests it will not be able to generate adequate profits from the product if the Competition Commission insists on a point-of-sale ban, as is widely expected.

In making this move Lloyds group joins lenders such as HSBC and the Royal Bank of Scotland, which have recently pulled back from offering PPI to customers.

So now that Lloyds TSB, Halifax, Bank of Scotland, Cheltenham & Gloucester and Black Horse have joined the list of companies that will not automatically offer cover to customers taking out personal loans, credit cards and mortgages, brokers have a big opportunity to fill the protection gap.

And this opportunity could hardly come at a better time because insurers are bringing to market a range of products that are tailored to the demands of the 21st century.

This is important because demand for PPI products and mortgage protection is set to rocket as the country continues to navigate the rocky waters of economic instability.

With Treasury predictions of 600,000 public sector job losses and an additional 700,000 redundancies in the private sector intermediaries owe a duty of care to their customers to highlight the benefits of having adequate protection in place.

Innovative products such as those currently being introduced mean that cover doesn’t even have to be tied to the mortgage any more.

Recommended

ROBERT MCCOY, PRODUCT AND COMMUNICATIONS MANAGER, PMS

Prepare now for an era of rising rates

The advice to start preparing now for rising interest rates might strike you as counter-intuitive, particularly as the prevailing wisdom is that we’re in for 12 more months of a 0.5% Bank of England base rate. But trust me, it’s not as daft as it sounds. It might not be for another 18 months but […]

ANDREW MONTLAKE: THIS REDUCES CLIENTS’ CHOICE

Industry saddened to see brand axed as A&L merges into Abbey

Santander’s decision to merge its Alliance & Leicester business with its Abbey brand has disappointed brokers. From October 15 all broker business will come under a single Abbey brand. Alan Mathewson, managing director of intermediary distribution and Santander Private Banking (UK), says the decision was taken to allow the bank to align its offering and […]

Newsletter

News and expert analysis straight to your inbox

Sign up