UK Protection Insurance Market 2017 – Opportunity, Driving Trends and deep study

Pune, India, 22nd September 2017: WiseGuyReports announced addition of new report, titled “UK Protection Insurance 2017: Critical Illness & Income Protection”.

Summary

UK Protection Insurance 2017: Critical Illness & Income Protection”, discusses income protection and critical illness insurance, looking at market size with regards to changes in contracts and premiums, in addition to claims. It highlights the barriers to consumer engagement, how products are distributed, and the main market players and their propositions. It provides five-year forecasts of market size in premiums to 2021, and discusses how the market is likely to change as healthcare technology is developed.

 

The income protection and critical illness insurance markets continued to grow in 2016. Their year-on-year percentage growth outstripped the total protection market, highlighting a growing market for illness- and injury-oriented products. However, together they still only account for less than 10% of the total protection market in terms of contracts and premiums. Protection products remain complex, and are still sold and not bought, making advisors key to distribution. Income protection in particular is highly reliant on advisors, and this is not likely to change soon. Meanwhile, individuals are beginning to purchase critical illness insurance independently online without advice, although advisors will remain key. To maintain market growth, providers and advisors must continue to build consumer engagement with these products.

 

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Scope

– Income protection grew by 7.4% to 119,459 in contracts and 10.8% to £48.3m in premiums from 2015 to 2016.

– Standalone critical illness insurance grew by 50.5% to 28,751 in contracts and 47.3% to £14.1m in premiums from 2015 to 2016.

– Legal & General dominates the critical illness insurance market, holding a 25.4% market share in 2016. LV= and Friends Life dominate the income protection market, with 27.3% and 23.1% shares respectively in 2016.

 

Reasons to buy

– Understand the barriers of uptake for critical illness and income protection, and learn how to increase consumer engagement.

– Explore how the distribution landscape is changing for these products.

– Discover which providers lead the critical illness and income protection markets.

– See how critical illness and income protection are forecast to grow over the next five years.

 

Table of Content: Key Points

1. EXECUTIVE SUMMARY 3

    1.1. Growing consumer engagement with IP and CII is vital 3

    1.2. Key findings 3

    1.3. Critical success factors 3

2. MARKET DYNAMICS 10

    2.1. Introduction 10

    2.2. The protection market has reached a new normal following the RDR 10

      2.2.1. Contract levels for protection products reduced in the wake of the RDR 10

      2.2.2. Protection is sold and not bought, making advisors key to the market 11

    2.3. Contracts and premiums for IP and CII grew in 2016 12

      2.3.1. IP and CII increased their share of the total protection market 12

      2.3.2. The IP market continued to grow in 2016 15

      2.3.3. The success of IP policies is due to products that cap payout duration at two years 16

      2.3.4. Standalone CII has grown, but remains small compared to the total protection market 17

      2.3.5. There are 16 times as many CII contracts sold as a with-rider product than standalone 18

      2.3.6. Mortgage-related term customers are most likely to choose CII as a rider 19

      2.3.7. Cross-selling CII as a rider product will be the easiest way to grow the CII market 19

      2.3.8. The group protection market is shrinking 20

    2.4. Consumer engagement with CII and IP is still relatively low 22

      2.4.1. The 7 Families campaign helped raise awareness of protection products 22

      2.4.2. The Building Resilient Households project looks to promote IP 23

      2.4.3. There is confusion around the different types of protection products available 23

      2.4.4. Only one in 10 people have IP in place 23

      2.4.5. There is confusion around what employers and the government will provide 23

      2.4.6. Individuals do not believe they will need protection products 24

      2.4.7. Protection products are seen as a luxury purchase, and the application process is long 24

    2.5. Over 90% of CII and IP claims received are paid 24

      2.5.1. Cancer is the largest cost for critical illness insurers due to the high number of claims 24

      2.5.2. The ABI is consulting whether stage one cancers should be excluded from full payment 25

      2.5.3. 93.1% of CII claims submitted were paid in 2016 25

      2.5.4. Mental illness is the highest claims cost for IP insurers 26

3. DISTRIBUTION DYNAMICS 28

    3.1. RDR has changed the distribution landscape 28

      3.1.1. The total protection market shows a decline in the restricted advice channel 28

      3.1.2. IP as a product is highly reliant on advisors, and this is not likely to change soon 29

      3.1.3. Individuals are purchasing CII independently without advice 31

    3.2. Robo-advice has entered the life space, but is not expected for IP or CII soon 33

      3.2.1. Life insurance products remain the focus for robo-advice tools 33

      3.2.2. IP is too complicated to be sold directly or advised without a human 33

    3.3. Insurers are developing their tools for advisors to aid distribution 33

      3.3.1. Tools that help advisors sell protection products more efficiently are beneficial 33

      3.3.2. Legal & General is testing how well advisors know its products 34

      3.3.3. Legal & General helps advisors prevent policies being lost through its early warning system 34

      3.3.4. LV=’s advisors can check likely underwriting outcomes using its new tool 34

      3.3.5. Royal London has improved the flexibility of its online service for advisors 34

      3.3.6. Royal London introduces e-signatures to speed up applications 34

4. COMPETITOR DYNAMICS 36

…Continued        

 

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