Protection reprice sharpens Norwich Union's competitive position

Article date: 22 May 2007

  • Mortgage holders could reap benefits from price changes

Norwich Union today announced price changes across its Mortgage Life Insurance and Term Assurance range in a bid to improve its offering for the UK's 12 million(1) mortgage holders.

The change sees prices made more competitive for consumers in a number of core areas, in particular those taking out Mortgage Life Insurance (MLI). This could come as welcome news at a time when many mortgage holders are feeling the pinch of higher monthly repayments, due to the Bank of England's recent interest rate increase to 5.5%.

89% of Norwich Union's MLI premiums can now be found amongst the top three providers, compared to 59% before the re-price.(2).

Those taking out MLI and term assurance policies lasting longer than the traditional 25 year term will also see more competitive premiums available. This reflects changes in market demand, which has seen increasing numbers of consumers requesting cover for 30 or 40-year mortgages.

Significantly, in February 2007 Norwich Union extended both MLI and term assurance with reviewable critical illness to cover 40 year and 50 year periods respectively.

Darren Dicks, head of protection marketing for Norwich Union, says: "We are constantly reviewing all of our protection products to make them as competitive as we can to the widest possible audience. Because customer needs are changing all the time, it is vital we take these market forces into account so we can give consumers exactly what they want at the lowest possible prices.

"The homebuyers' market is still buoyant with more than 56,000 mortgages taken out in March 2007(3), an increase on the two previous months. However, rising house prices mean many individuals have had to take out mortgages lasting beyond the traditional 25 years, up to 40 or even 50 years. We have taken these factors into account, to offer competitive premiums for these customers as well as those following a more traditional mortgage path."  

The reprice follows hot on the heels of Norwich Union's Protection Service Promise which was launched in February of this year to offer additional support to advisers. The Promise includes a pre-sales helpdesk, a two-day turnaround time for decisions on applications(4) and free cover for up to three months on term assurance and mortgage life insurance.(5)

Example rates under the reprice are as follows:





Before reprice

MLI (without Integrated Critical Illness)

Female, Non-smoker, 30 nb, £100,000, 15 year term   




Term Assurance (with Integrated Reviewable CI)

Male, smoker 30 nb, £125,000, 35 year term




MLI (with Integrated Reviewable Critical Illness)

Joint smoker, 40 nb, £175,000, 20 year term




MLI (with Integrated Reviewable Critical Illness)

Female, non-smoker, 35 nb, £100,000, 15 year term





Press office contacts:                     

Norwich Union
Sarah Horner 01904 452828 Out of hours 07800 691569
Louise Soulsby 01904 452617 Out of hours 07800 699526

Notes to editors:

(1) Source: Council of Mortgage Lenders. Actual figure is £11,712,000 as of Q1 2007.
(2) Position before re-price and estimated position after re-price is based on premium data as available 11 May.
(3) Source: Council of Mortgage Lenders
(4) All decisions made within two days of receipt of an accurate and complete application, unless underwriting is required.
(5) Free cover is available for up to three months from receipt of a fully completed application for Term Assurance and Mortgage Life Insurance. Free cover was previously available under the terms of the Norwich Union Protection Promise, for the time being this free cover will continue to be presented to end customers as the Norwich Union Protection Promise. Free cover is available up to 2 x the sum assured, with a maximum of £1,000,000 and does not cover death from suicide, any pre-existing medical conditions at the time of application or critical illness. The Protection Service Promise and the elements contained within it may be reviewed or withdrawn at any time.

Term Assurance and Mortgage Life Insurance policies pay out a lump sum if the policyholder dies during the term of the plan. These plans have no cash in value at any time.

About Norwich Union
Norwich Union is the UK's largest insurer. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.

Norwich Union is the UK's largest general insurer with a market share of around 14%, with a focus on insurance for individuals and small businesses.

Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at

Back to top