Prudential, Britain’s second biggest insurer, is aiming to grab a 10% share of the life, critical illness and income protection insurance market after teaming up with South African group Discovery. The two have set up a new joint venture, Pru Protection Holdings, and will invest £30m in the first year.
The move comes after Prudential linked up with Discovery four years ago to sell innovative private medical-insurance plans through Pru Health, a joint venture. The two companies have so far invested more than £70m in Pru Health, which will become part of the new company.
Since launching Pru Health in 2004, Prudential has sold more than 130,000 private medical insurance policies and grabbed a 1.1% share of the overall market. However, in new business terms it is second only to Bupa.
Prudential has launched a series of 25 protection plans covering life insurance, critical illness, income protection and disability insurance.
Prudential claims it will revolutionise the protection market. The plans will use a similar structure to Pru Health products, where customers gain discounts on their insurance premiums by leading a healthier lifestyle. Customers get Vitality points for going to the gym, giving up smoking and eating more healthily.
Prudential already has deals with gym clubs Virgin Active, LA Fitness and Cannons. It has also signed up supermarket group J Sainsbury to participate in the points scheme. Customers who are rated the healthiest are likely to see the cuts in their premiums of more than 3% a year.
“We believe we can revolutionise this market. Some parts of the insurance industry have been stagnant, but we are aiming to revive it by bringing innovation and the chance for people to be rewarded for being healthier,” says Shaun Matisonn, the head of Pru Protection.