Last week, PruProtect called for protection insurance to be made compulsory and said it is already seeing signs of advisers switching to protection to anticipate the Retail Distribution Review (RDR).
However, since then several prominent members of the protection industry have dismissed the suggestion.
Group risk trade body Grid called for incentives rather than compulsion, while Roger Edwards, proposition director for Bright Grey and Scottish Provident, said the public would potentially see this as another tax and that it did not address people’s differing needs.
This latter point was highlighted by Alan Lakey, principal of Highclere Financial Services, who noted that even if it was compulsory through workplace schemes it would still leave many unaccounted for such as the self-employed or homemakers.
The practice of compulsory insurance is also against ABI policy.
Nick Kirwan, assistant director of health and protection at the ABI, said that those insurances currently compulsory were due to covering legal risks associated with them.
He also acknowledged that there would be problems with enforcing such a regime, while the ABI and other industry bodies have also been engaging with government to consider greater involvement in covering the state welfare system.
However, Andy Milburn, interim head of marketing at Ageas Protect, supported the call from PruProtect and cited his experience of the Australian system.
Deepak Jobanputra, actuarial and product director at PruProtect, said that progress in medical science was making protection against death insufficient as many more previously fatal diseases were now treatable but left lasting effects on lives.
He also bemoaned the current state of the market, saying: “It is unfortunate that the value of protection has been eroded over time, due in part to the incessant focus on price. The ‘buy it as cheap as possible’ attitude detracts from meeting the real needs of consumers.”
Jobanputra continued by supporting the role of advisers in protection sales, adding: “In order to understand and genuinely meet consumers’ needs the role of advice cannot be overlooked.”
“I believe advisers are best placed to help consumers with this fundamental aspect of their life planning. Absolute compulsion may not be an easily achievable reality but our aim must be to provide protection to our society,” he concluded.
