Exeter Family Friendly is to increase premiums on its short-term income protection plan, Bills & Things.
Premiums will increase by 15% from 2 April as a result of a number of factors, including claims and acquisition costs. As a result, premiums will start from £11.49 instead of £9.99 per month.
Andy Chapman, the insurer’s chief executive, said: “This is not necessarily the type of news that advisers want to hear, but we feel it’s important to be as open and transparent as possible so everyone understands why we’ve taken this step.
“Over the past couple of years, we have experienced a higher incidence of claims on Bills & Things than we expected when we initially priced the product. In addition, our initial pricing assumptions were based on Bills & Things being sold predominantly direct to consumers; whereas the product is now sold exclusively through advisers. This has had an impact on both our acquisition and business processing costs.”
As of 2 April quotes for new business will include the price increase, whilst for existing Bills & Things policyholders the increase will take place at their third renewal, as premiums cannot be reviewed for the first three years of a policy.
Chapman added: “We know how important it is to deliver competitive premiums, but equally we understand the importance of delivering sustainable products and performance for the long term. This move is about making sure that Bills & Things can continue to provide vital, simple financial protection for many years to come.”
