ASU popular in financial services

The network noticed that there was a significant increase in the number of applications from white-collar professions during the last four months of 2001, compared to 2000. While other sectors also increased, there was a significant increase in policy applications from companies involved in the travel industry (from 2 to 11 per cent of applications), IT (from 4 to 11 per cent) and financial (from 1 to 9 per cent). This coincided with the start of recent world events which have led to increased concerns over the threat of terrorism, and concerns over a worldwide recession.

David Quick, managing director of CETA, said: "Unemployment is set to rise to over one million as high-profile redundancy announcements made in recent months begin to feed through. Most UK households have a high level of debt and as more people begin to feel nervous about the security of their employment they will be looking to ensure their mortgage and essential bills will continue to be paid if they lose their job.

"The deteriorating employment picture offers an opportunity for intermediaries to offer their clients high quality advice. A common mistake is to try to sell clients a full ASU policy when in reality they may only be interested in or need protection against the imminent threat of unemployment. By breaking the cover down intermediaries will be able to tailor their advice to address a specific need and are likely to generate more business as potential customers will not be put off by the cost of a full ASU policy."

"There are a range of ASU products available. This market niche is more sophisticated than many intermediaries realise and with commission rates as high as 25 per cent it is one they should market more intensively. However, they must ensure that they have access to competitive products and good back-office support. Once these are in place they will be able to compete very effectively with the high street banks and building societies whose own label products are often very expensive."