National Friendly returns to intermediary market

National Friendly returns to intermediary market

National Friendly is ready to start writing healthcare insurance policies again, five years after having to pull the plug on writing health insurance new business.

Today (20 June), the society hired Lucy Pinson as business development manager in a bid to improve its intermediary market reputation.

She previously worked at the firm, before moving to other health insurers SimplyHealth and Vitality.

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The recent launch of its Your Health Fund product comes five years after the society stopped writing new health insurance business in 2011, because of a higher than expected claims experience resulted in capital adequacy issues.

Tom Conner, director at Drewberry, said the draw of the [previous] policy was that 25 per cent of the premiums went into a claims fund, which acted like a deposit account for future medical treatment, while 75 per cent went into their insurance fund.

“If a claim arose then the provider would pay out a multiple of what was in the claims fund, plus a payout from the insurance fund, but if no claims arose, or the client wanted to cancel the policy, then the cash in the deposit fund could be paid back to the client.”

He added although it was a popular policy, the provider offered too generous a multiple and decided to close the product to new business.

“It is yet to be seen if the revised terms will resonate with clients and whether advisers feel confident enough to offer this product again given previous longevity issues,” Mr Conner stated.

National Friendly’s chief executive Jonathan Long said that the society was in the market five years ago with an healthcare product that provided a cost-effective alternative to the full refund products offered by many of the other providers.

“This product sold well and was liked by customers, as demonstrated by a fair proportion of customers still retaining their National Friendly policy today, even though we have not written any new policies for five years,” he stated, adding commission levels were on a par with the other providers,” he said.

“National Friendly temporarily ceased writing new business as our healthcare claims experience took an unexpected downturn and we did not wish to increase our exposure further by writing new policies.

“As our claims experience is now much less volatile, and we have the backing of a major re-insurer, we are now ready to start writing new policies again.”