Leading insurance company AXA has cut its rates across its life protection range to keep up with an increasingly price-driven market. 

The biggest drop is for its Guaranteed Level Life Cover, with an average reduction of 6% across all products.

Other covers affected include Decreasing Life Cover and Earlier Critical Illness Cover.

Director of protection marketing at AXA, Iain Mallon, says: ‘As part of our continuous review of our pricing we have brought down the cost of these covers to make sure we remain one of the most competitively priced protection insurers.’

A leading insurance company has revealed a new income protection product designed to replace mortgage payment protection insurance.

The income protection product, pays out until the policyholder goes back to work, the plan term ends or the policyholder dies.

It offers cover for accident, sickness and unemployment, with level mortgage payment protection and the choice of level or index-linked living expenses protection. The policyholder can claim as often as necessary.

Their head of protection, says:

‘Based on extensive research, we saw that the market needed a more flexible product that could be tailored to their client’s individual needs and that was easy to understand. We believe this will stimulate the market at a time when advisers really need quality protection products to satisfy their clients’ needs as well as supplement their income.’

According to one report in The Times Online, people are taking out more insurance policies due to the credit crunch. 

As the credit crunch continues to unfold, one of the biggest worries for many people is that they may not be able to pay their mortgage, or if they lose their job or are unable to work because of illness or accident.

Such anxieties are on the increase because of the economic uncertainty being confirmed by insurance broker Lifesearch, who have recorded a noticeable rise recently in sales of policies designed to safeguard people’s finances.

They suggest that sales of policies such as income protection, unemployment and critical illness cover tend to boom when other markets suffer.

The insurance company has paid out over £150m for over 4,540 critical illness claims from 2000 to 2007.

Scottish Widows has revealed that these payments included more than £29m for over 847 critical illness claims last year. Making it the second year the company has increased its amount of successful claims.

The insurer also revealed that 95% of the critical illness claims came under five categories:

 - Cancer represented 61%

- Heart-related claims made up 21% of critical illness claims

- Stroke claims accounted for 7%

- Multiple sclerosis accounted for 4%

- And children’s cover accounted for 2%

Scottish Widows protection market director, Richard Jones, said: ‘The need for financial protection for both the family and business has never been greater, especially with more families relying on two incomes and the increase in the number of people who are self employed.’

Christophe Tamet has been named Legal & General’s new head of credit.

Earlier in his career Tamet worked within the chief investment officer of JP Morgan Chase as credit chief.

In his new role he will be directly responsible for Roger Bartley, L&G’s active fixed income chief.

The insurance firm has made the appointment to bolster the fixed income team, following a confident performance over the course of the last year and a half.

Bartley has welcomed the presence of Tamet’s and that it was a strong indicator that L&G was committed to improving the fixed income team.

Peter Graham has been named as Legal & General’s new managing director of their general insurance business.

Mr.Graham brings 15 years of insurance industry experience to the position, and during his career has served with both esure and Towergate as an executive.

He first joined the firm on 25 March 2008, and is based in Legal & General’s Birmingham office.

Income protection provider Unum is introducing its new Premier cover product this month.

Unum is offering a bespoke package to group income protection clients in a bid to minimise the time workers have off sick.

According to the FT Adviser, the insurer will work with companies advisers offering tailored vocational rehabilitation on managing absent employees, and working out systems to get them back into work.

National accounts director for Unum, Colin Fitzgerald, called Premier income protection: ‘a proven, modern and flexible support system’.

Charles Richards, an IFA with Capital Asset Management, said of Unum: ‘For the clients I have seen use it they are fantastic. I would probably go straight to it for group income protection‘.

Friends Provident has reported the proportion of their critical illness claims not paid out as a result of non-disclosure reduced by a third to 6.5% during 2007. 

The amount of claims declined for non-disclosure during 2006 was 9.9% and the 2007 figures are the first since the insurer brought in the policy of paying a proportion of the claim when unrelated non-disclosure occurs.

A proportion of claims that were declined for non-disclosure last year was lower than the proportion declined for claimants that did not meet the policy conditions, which was 7%, down from 8.8% in 2006.

The claims that did pay out increased to 86.5% last year, up from 81.3% in 2006. In 2007 Friends Provident out a total of £35.7m for critical illness claims. Its figures also show that cancer is the most common cause for a claim and average age of a claimant is 44.

The average critical illness payout last year was more than £58,500 and the largest claim was £750,000.

Head of protection at Friends Provident, Mark Jones, said: ‘I am delighted that the three-pronged approach we have applied to our range of protection products of education, simplification and promoting a culture of fairness, is beginning to pay dividends. The improvement in the number of claims paid will help increase consumer confidence in protection products.’

Insurance Providers believe sales of income protection will rise in 2008.

Research carried out by Life Search found that 40% of staff at 28 insurers and reinsurers thought income protection sales would increase in 2008. 

Matt Morris, LifeSearch’s policy adviser, said there had been a more “positive vibe” around income protection recently, with recent figures from the Association of British Insurers showing an increase in new business sales and a raised awareness of the product among advisers.

He said: ‘There is also more awareness generally among the public – the economic uncertainty has resulted in more consumers becoming interested in ways to protect their mortgage. People are worried about redundancy and there is more scope to sell income protection off the back of that.’