Jonathan Evans MP said consumers hear “the toxic ‘p’ word” which puts them off buying products.
Banks have paid out more than £20bn in compensation for mis-selling PPI to customers, usually alongside another product. The Financial Ombudsman Service this week said it is still dealing with some 4,000 PPI-related complaints on a weekly basis.
Evans said: “In meetings I have highlighted the great damage the word protection has had from the whole of the PPI scandal, and the tragedy that [it] has coincided with a time when probably more people have needed protection than ever before.
“[The word protection] has taken on this toxic connotation.”
Evans was speaking as the parliamentary group met to discuss welfare reform with representatives from the Association of British Insurers, Unum, Zurich and Aviva.
Aviva income protection (IP) product manager Julie Higman suggested some protection products had bigger problems than reputation through association.
“Before I started at Aviva I’d never even heard of income protection, though I’d been working in finance my whole career. It’s not really surprising [the public] hasn’t heard of it either.
Higman told the committee that 47% of employees applying to Aviva for income protection had sick pay arrangements from their employers.
The MPs heard the opinions of the industry on how IP was viewed by employers as well as how it was useful for employees.
Andrew Potterton, head of proposition development at Unum, said: “Employers value the consistency that comes with having income protection products.
“It’s not a relatively uninformed or inexperienced line manager having to decide whether the absence is valid, there’s an insurer sitting behind that who can give some expert opinions on the way.”
