Critical Illness  

Defaqto launches critical illness comparison tool

Defaqto launches critical illness comparison tool

Financial research group Defaqto has launched a tool to compare critical illness products in the whole of market. 

CIC Compare uses Defaqto’s historical data to allocate scores to the main critical illness definitions of all policies dating back to 2009 and allows advisers to contrast new or current versions with earlier policies and closed plans. 

The scores are based on the likelihood of being able to claim in the event of contracting a condition.

Defaqto used input from product pricing experts and focused on the quality of the definition of the condition, rather than the statistical risk, it stated.

A total of 32 conditions, including the 21 set out in the Association of British Insurers guidelines, have been allocated a score, accounting for 98.9 per cent of UK claims. 

In addition, the tool enables the comparison of policy wording for a further 113 additional conditions. 

David Cartwright, head of insight for wealth and protection at Defaqto, said: "With so many factors to consider, CIC policies are complex and analysing them is time-consuming.

"CIC Compare has been developed to not only save advisers’ time but also help them to make better-informed decisions, recommendations and manage compliance risk.

"As CIC policies evolve, comparing older policies with new products available becomes even more complicated."

He added: "CIC Compare enables advisers to make better-informed decisions and provide transparent advice by comparing CIC policies easily side-by-side.

"Ultimately, it reduces complexity, ensuring that advisers' clients end up with the most comprehensive policies with the most fitting wording of CI definitions for their specific needs."

CIExpert, launched by Alan Lakey in 2012, was among the first critical illness comparison facilities made available to advisers.

Mr Lakey welcomed Defaqto’s new tool.

He said: "The fact that other companies are moving into this areas just emphasises the dire need for a research capability to assist advisers as the critical illness market becomes ever more complex . 

"The Defaqto system was originally designed with a focus on highlighting issues for the adviser when rebroking an existing policy.

"Our view is that focusing on 32 out of the 142 standard CI conditions still leaves something to be desired as advisers, clients and the Fos require a comprehensive reflection of advantages and disadvantages when it comes to re-broking plans.

"Limiting comparison to the last 10 years is slightly restrictive as is ignoring white label and D2C plans."

He added: "CIExpert launched in 2012 and has created a strong market presence over the past seven years, like any clever idea it was bound to be copied by other firms eager to gain market share. 

"Imitation is clearly the best form of flattery however, it is true to say that any system which assists advisers in negotiating the critical illness maze is welcome."

Defaqto’s launch into the market also follows the Finance & Technology Research Centre's (F&TRC) launch last month of a function allowing advisers to compare and review child critical illness policies between providers.