Nine of the country's most prominent life insurance companies this week admitted that there was room for improvement in the way they treat consumers when they are selling products such as pensions and endowments.
This followed research commissioned by the companies which showed that about two thirds of people who surrendered policies had done so because their financial circumstances had changed, usually through a reduction in income.
The companies commissioned the research after the Securities and Investments Board published figures last December which indicated that up to a third of savers surrender their policies within two years of signing them.
Sir David Walker, then chairman of the SIB, hinted that all might not be well with the way the industry was selling its products.
Keith Bedell-Pearce, a director of Prudential Corporation, which led the life companies' initiative, said there was no widespread evidence of hard selling. The fact that the companies' research does not bring out harsh criticisms of the way life products were sold to the 7,500 people interviewed is a comforting one for the insurers.
Mr Bedell-Pearce accepted, however, that salespeople need to find out more about their customers to see how their finances might be affected by redundancy or other big changes.
The life offices have committed themselves to reviewing their sales systems and explaining the consequences of early surrender. The insurers will also look at how to make their endowment and pension policies more flexible so there is more room to reduce payments temporarily.Reuse content