Lloyds Banking Group ceases sales of PPI in favour of Life insurance

Monday, August 2, 2010

Lloyds Banking Group has confirmed that it will no longer be selling PPI (Payment Protection Insurance). The product has garnered controversy in the UK, because many industry critics state that banks take a large profit from PPI sales, which has resulted in a series of battles in court as people attempt to recoup costs.

A number of banks have been fined for selling PPI under false pretences, providing it alongside loans to protect against redundancy or illness. Consumers who opted in to PPI from banks were not made aware that they could purchase the product elsewhere for a much reduced price.

Instead of selling PPI directly to consumers as a set targeted product, Lloyds will instead offer PPI information to clients who subscribe to credit cards, mortgages or loans. The company have issued a statement outlining their plans to offer life insurance, critical illness and protection products, without compromising existing PPI policies which customers have taken out.

Lloyd's is the world's leading specialist insurance market, offering specialist underwriting expertise. The market is home to over fifty managing agents and over eighty syndicates, which offer an extensive concentration of specialist underwriting expertise and skill within the insurance market. The risks placed with underwriters originate from clients and other brokers and intermediaries all over the world. Together, the syndicates underwriting at Lloyd's form one of the world's largest commercial insurers and a leading reinsurer.

Payment Protection Insurance (PPI) in the majority of cases is extremely expensive and often forced on people who take out loans and credit cards. One of the most important facts to realise about PPI is it's a standalone insurance policy. This means that all PPI policies are roughly the same so it pays to buy the cheapest.