Three Prudential executives quit over bungled insurance offer

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The Independent Online

Three executives at Prudential resigned yesterday in the wake of a bungled insurance offer that led to thousands of customers facing an increase in premiums while waiting for their policy to be processed.

Three executives at Prudential resigned yesterday in the wake of a bungled insurance offer that led to thousands of customers facing an increase in premiums while waiting for their policy to be processed.

Richard Field, director of product development at Prudential, Richard Taylor, director of pensions and protection products, and Keith Bevan, senior protection product manager, left the company after a special pricing offer backfired.

Prudential was left unable to meet the demand for an insurance product to cover the onset of a critical illness that was very competitively priced. A backlog in processing applications developed and Prudential withdrew the rates it had put on offer from anyone who had not yet received an acceptance letter. The move imposed a 40 per cent price rise on up to 50,000 people waiting to have their insurance applications processed. It also changed the terms of the plan so that it could increase premium rates at a later stage.

Insurance brokers and advisers have had to search for new policies for their clients and have demanded compensation for themselves and their customers.

A spokesman for Lifesearch, an insurance broker, said: "We believe that Prudential have been following an inexplicable path in refusing to properly compensate their disappointed and angry customers. It is highly unlikely that their protection division will attract much, if any, new business, and thus we see these resignations as well timed in anticipating the inevitable."

Prudential has offered brokers a flat £75 to cover the costs of finding their clients new cover, and 30 days' free life cover to those customers whose applications were stuck in the processing pipeline. Some have been waiting two months for an acceptance letter. A Prudential spokesman said: "We can confirm that a number of individuals have resigned from the company." But he refused to expand on reasons for their departure. "Our critical illness policy was extremely successful and it is a feature of the market in general that there are ongoing changes to the pricing of products. We had a phenomenal demand that put a strain on our customer service levels."

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