Friday, November 27, 2009

ABI Displays Empathy

ABI Displays Empathy

In a rare display of public empathy, the Association of British Insurers (ABI) says that life companies must do more to design products with consumer needs in mind.

ABI head of distribution policy, Peter Jolly, said that life companies have failed to properly engage with consumers.

"I guess the evidence of that is we need to sell them. If we had products that people really wanted they would come and buy them and most of the products in our industry are designed to be sold, rather than bought.

And the industry's failure to develop a new regular premium savings product is probably evidence of that. As the endowment market tailed off we don't really have a replacement


The endowment market "tailed off" because it was a lousy product, not fit for purpose and badly managed.

Thursday, November 19, 2009

Class Actions

Class Actions

This week's Queen's Speech has raised the possibility of hapless endowment policy holders being able to mount class actions against the life assurance industry.

The government proposes to give consumers the right, for the first time, to take "class action" suits through the courts in cases of large-scale wrongdoing such as endowment mis-selling or personal pensions.

This is something that I have been calling for over many years. Not only has the financial services industry mis-sold these flawed and badly designed products, but they have mismanagement them (despite awarding themselves very generous "management" fees and commissions).

The consumer will not only has grounds for suing wrt mis-selling, but also has grounds based on the fact that the products are not fit for purpose (ie they did not pay off the mortgage, which is what they were meant to do).

Why buy the product if it wasn't going to work?

Unfortunately, there is little chance of this becoming law this side of the election.