Free Business Dissertations - An Overview Of Income Protection Insurance On An Industry Wide Basis
An Overview of Income Protection Insurance
On an industry wide basis Payment Protection Insurance (PPI) is a £15b industry (thedoghouse.co.uk, 2005) and represents fully fourteen percent (14%) of the Bank’s profits (Credit Loans Insurance). In consideration of the bank’s performance as outline in the ‘Executive Summary’ the approach to this profitable area represents a business concern that requires careful scrutiny with respect to our customer’s, shareholder’s and stakeholders relative to our reputation, public image and competitive positioning within the banking community. The foregoing takes on increasing importance as a result of various articles in the national press that specifically targets Lloyds approach and tactics in the selling of PPI, as evidenced by an article in The Guardian on 19, November, 2005 that states If you bank at Lloyds TSB, watch out. The foregoing goes on to point out that Financial consultants at the home of the black horse say they are under pressure., and specifies that the foregoing is targeted at customers who don’t need (PPI) or can’t afford to pay for them. (The Guardian, 2005). The preceding becomes particularly disturbing in light of the intent of the Office of Fair Trading announcement that its study into the Payment Protection Insurance industry will begin in the early part of 2006, along with an announcement by the Financial Services Authority that asked the providers of PPI to take urgent action to improve their selling practices. (Reuters, 2005) More importantly, the Financial Services Authority stated, a number of firms would be investigated (Reuters, 2005)
The foregoing raise business, public image, ethical as well as bottom line ramifications for Lloyds TSB as a result of the nationwide inquiry into PPI selling practices by the Financial Services Authority (FSA, 2005), Office of Fair Trading (Office of Fair Trading, 2005) and the Competition Commission (Competition Commission, 2005) In light of the foregoing we at Lloyds TSB should conduct an extensive look into our policies, procedures and practices in the area of Payment Protection Insurance with respect to the areas outlined under Executive Summary, which were identified as follows:
Is the institution flirting with regulatory as well as legal issues that could damage and or impact the banks reputation and public image?
Are our banking practices in the area of the selling of PPI operating in an ethical manner?
Is there a possibility that the bank’s practices in this area require either further examination or inquiry?
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