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IFAs switch to friendly societies for income protection business

5th June 2009 Print
Members of the Association of Friendly Societies who offer income protection products have published new business figures for 2008.

Aggregate data from seven providers indicates that 98% of new sales by value were generated by IFAs and Whole of Market advisers.

Martin Shaw, General Secretary of the Association of Friendly Societies commented: "IFAs are increasingly aware of the superior income protection products and high service standards offered by friendly societies. In 2008, 98% of new business was generated by IFAs, who appear to be substituting friendly society products for less attractive products by mainstream providers. This has lead to another successful year for new business in 2008, with new sales up 14%."

The new business figures compare to ABI statistics from insurance companies that show the market as a whole saw a reduction in new business of 13%.

At the same time the sector has provided statistics that show that 95% of all claims received were treated as valid and paid during 2008.

Martin Shaw added: "The results reflect both the transparency of friendly societies as well as their commitment to supporting their members at a time of need. Indeed at this time of recession it is a mark of the dedication of friendly societies to treating their customers fairly that the proportion of claims paid, at 95%, is the same as that for 2007.

"We believe information on claims is vital for consumers and advisers, in helping them to make an informed choice when purchasing income protection cover, and urge the rest of the insurance industry to publish similar data."