Insurers to overhaul life sales

TWO of the biggest ever reviews of the way people are sold life insurance in Britain are to be commissioned in the coming days as the industry seeks to rebuild confidence in the savings market.

One will focus on customer service while the other will study sales channels, and crucially whether incentives to independent financial advisers influence the advice customers are given.

The Association of British Insurers will have the results by the autumn and hopes the initiative will provide the answers to help close the £27bn savings gap.

The timing is a clear signal the industry is keen to get its own house in order before the wave of criticism certain to follow the Commons Treasury Select Committee's investigation of the market.

Over the weekend, the ABI revealed plans to beef up its mortgage endowment code to ensure firms include far more information about what action people facing a shortfall on their home loans can take.

An ABI insider said: 'The spirit of this is, 'look, it's quite apparent people have concerns, some are justified, some aren't, so let's have a sensible debate based on the facts and a sensible analysis.'

The chief executives of Prudential, Legal & General, Standard Life, and Norwich Union-owner Aviva were due for another confrontation with MPs on the Select Committee today. At their last meeting, over endowment mis-selling, chairman John McFall likened Standard Life to former Iraqi information minister Comical Ali.