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MPPI ‘marketing gimmick’ claim refuted

Ramesh Sharma

June 1, 2004

With a number of providers offering age-banded MPPI products, for the 18 to 30 age range, Paymentcare is worried these deals are not providing the ‘average’ client any protection at all, with the Council of Mortgage Lenders (CML) indicating the average age of the first-time buyer is 34.

Shane Craig, managing director of Paymentcare, was shocked that age-banded solutions were being touted around the market. Craig said: “Who is this really helping when the CML confirms the average age of the first-time buyer is now 34? This means that anyone above this age band is effectively footing the bill to subsidise the reduced premium – maybe it’s more of a marketing gimmick.”

However, Scott Fynn, senior marketing manager at Select & Protect, refuted claims that age-banded solutions were a ‘gimmick.’ He said: “We acknowledge and agree with the CML findings that the average age of the first-time buyer has increased.

“This therefore demands a more sophisticated way of pricing MPPI for customers. By offering premiums based on age, clients pay for cover according to their actual individual risk and not subsidising others. Age-related MPPI means that younger, lower-risk clients pay less at a time when it is perhaps needed most.

“We would in no way see MPPI cover as a ‘gimmick’ but as a valuable protection product which should be offered to clients as a means to protecting their most important asset – their home.”

Ted York, managing director of Berkeley Alexander, added: “We throw down the gauntlet to anyone that believes their flat rate for a 34-year-old can beat our age-banded range. For the younger buyer there is a great deal more merit in an age-banded product.”


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