Alexander Burgess is a director of British Insurance
In order to bring much-needed credibility back to mortgage payment protection and to reduce the massive protection gap, providers will need to offer products that are transparent and offer genuine value for money. There are very few mortgage lenders brave enough to offer mortgage payment protection in 2014 and I am truly astonished that bad practise continues and lessons have not been learned from the PPI mis-selling scandal.
In particular, there are mutual building societies, whose purported philosophy is to treat customers fairly are offering their customers Defaqto 1-Star products, with loss ratios of under 10%. This is a clear case of profiteering and contempt for customers, who will only realise that these products will not meet their expectations when they come to claim.
Today, to restore consumer confidence in mortgage payment protection with its much-maligned reputation, providers need to design policies that: are highly ethical; will pay claims; and meet the honest expectations of policyholders.