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UK Protection Insurance: Critical Illness & Income Protection

Press Release   •   Nov 22, 2016 06:54 EST

Summary

Individual product performance in the protection market is a turbulent and confusing picture, with erratic premium behavior across the board. While term (and specifically non-mortgage term) products are still the dominant force with over 70% of protection share, there has been downward pressure on every product line in recent times, reflecting the uncertain, fragile national macroeconomic picture. Indeed, in the absence of major market-driven change it is the macro-environment that dictates performance.

Key Findings

-Although the Retail Distribution Review (RDR) was aimed at the retail investment market, and commission-based business is still permitted for protection products, the net effect has been that advisors offering a range of services have had to adapt their models. In addition to RDR, a new emphasis on conduct has been ushered in with the Financial Conduct Authority, and key protagonists in the financial services markets have been overwhelmed with the volume of regulatory change in the last few years.

-Individual product performance in the protection market is a turbulent and confusing picture, with erratic premium behavior across the board. While term (and specifically non-mortgage term) products are still the dominant force with over 70% of protection share, there has been downward pressure on every product line in recent times, reflecting the uncertain, fragile national macroeconomic picture.

View Report At http://www.marketresearchreports.biz/analysis/852861

Synopsis

Verdict Financials UK Protection Insurance: Critical Illness & Income Protection examines the protection market, focusing on two products: critical illness and income protection. It examines how the market has performed and explores the key drivers shaping the market going forward. It also highlights the impact of RDR and provides a forecast for the next five years.

ReasonsToBuy

-Review your strategy against both existing and new challenges regarding the critical illness and income protection markets.

-See where the opportunities are for digital disruption and how insurers need to respond.

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Table of Contents

Table of Contents

EXECUTIVE SUMMARY

Protection has reached a new normal and needs to be reinvigorated

Key findings

Critical success factors

MARKET DYNAMICS

Introduction

The protection market has seen major changes

Protection is sold not bought, making advisors gatekeepers to the market

Contract levels have reduced due to the RDR

Banks have retrenched to core business and reduced their advisory capabilities

Protection products are exhibiting varying performance levels

IP and CII account for a mere 7.2% of the total protection market

Prices rises have sustained the market

The IP sector has struggled to recover its 2012 market position

The product offers significant benefits, but awareness and engagement is low

Confusion exists about the types of cover

The application process is long

Little is done to spread the word on policy benefits

CII penetration is very low, and has been declining

Issues affecting IP also impact CII take-up

The impact of ill health is well publicized

CII is more likely to be added to another protection product

The product has received negative press regarding claims

Like IP, the CII sales process is long

With-rider products significantly expand the CII market

Half of mortgage-related term assurance has CII added

The group life market can detract from individual protection

Pressure from new regulation is currently minimal

The protection market is out of the spotlight for now

All quiet on the regulation front

RDR has effectively excluded less-affluent consumers from the market

Subtle social change is taking place, while a lack of proactive customer engagement means the market is stalled

Industry disruption has been catching its breath

Insurers are focused on operational pressures

PRODUCT DISTRIBUTION TRENDS

RDR has changed the distribution landscape for protection products

The total protection market picture reveals the collapse of restricted advice

However, the premiums story shows the value of advice

Frustrations are creeping in among advisors

IP is still a product that needs advisors

The restricted advice channel has shrunk

The independent channel provides more value per contract

The independent advice channel has shrunk back from CII

The restricted advice channel has held firm

Pure direct channels are gaining ground

More changes are afoot in the advice market

 

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