Undewriters pulling out of sector 'will undermine trust in PPI'
Cassidy Davis, the specialist personal lines Lloyd’s insurer, has warned that underwriters withdrawing from PPI in face of reform of the market threaten to further undermine confidence and trust in the sector at a time when demand for consumer protection has never been higher.
Since the Competition Commission’s remedies were announced, Cassidy Davis said it was aware of a number of lead insurers who were withdrawing facilities from scheme distributors, particularly internet-based distributors of monthly stand-alone products.
Aidan Plumridge, head of marketing and business development at Cassidy Davis, said: “A combination of the Commission’s remedies, the worsening economic situation and a sharp increase in claims notifications has created some short-termism to creep into the market.”
“If there is anything to be learnt from the lessons of writing PPI in previous recessions it is that sensible underwriting and a long-term approach are crucial. What intermediaries and customers do not need now are insurers to drop in and out of the sector at the first sign of a challenge.”
The company, which has been writing PPI for over 30 years acknowledged the Competition Commission’s drive for reform of the market and believes that there is already a determined and strong appetite for more responsive PPI cover.
Chris Biles, active underwriter of Syndicate 5820 at Cassidy Davis, said: “In reality, there are many flexible products available offering monthly premiums, straightforward terms and exclusions. We are very much alive to the new opportunities today’s environment is presenting.
“Terms are available where the products, pricing and underwriting mechanisms are sensible and where there is a proven track record. Old style PPI may be dead but new style PPI is very much alive.”“
