NU withdraws Paymentshield unemployment insurance

by Gill Montia

Story link: NU withdraws Paymentshield unemployment insurance

Norwich Union (NU) has withdrawn its unemployment-only cover, provided through its partnership with Paymentshield, which claims to be the UK’s largest independent supplier of mortgage related insurance products to the intermediary sector.

The withdrawal has been made with immediate effect and analysts expect other insurers to follow suit, given that both the Prime Minister and the Governor of the Bank of England have acknowledged that Britain is entering a recession.

NU is also understood to be reviewing unemployment-only policies distributed through other partnership agreements in the mortgage protection market.

Unemployment has been rising sharply, with official figures showing that the number of people out of work in the UK increased by 81,000 between May and July, to 1.72 million.

Insurers have already responded to the worsening of the credit crisis by increasing premiums; according to a report in The Telegraph, research shows that the cost of cover has increased over 17% in the past year.