UK Protection Insurance 2019: Critical Illness & Income Protection

Table of Contents

1. EXECUTIVE SUMMARY

• 1.1. Market summary
• 1.2. Key findings
• 1.3. Critical success factors

2. MARKET DYNAMICS

• 2.1. Introduction
• 2.2. The total protection market grew in 2018
  • 2.2.1. The growth rate of the total protection market slowed down in 2018
• 2.3. Growth in the IP and standalone CI markets slowed down in 2018
  • 2.3.1. The share of IP and CI contracts in the total protection market has grown for the past four years
  • 2.3.2. The IP market experienced subdued premium growth in 2018
  • 2.3.3. UK households are being squeezed
  • 2.3.4. The standalone CI market cooled down after two years of extremely strong growth
  • 2.3.5. CI is much more popular when sold as a rider
  • 2.3.6. The group life market experienced explosive growth in 2018
• 2.4. Cancer accounts for 63% of all CI claims paid
  • 2.4.1. The average CI claim payment decreased by £2,000 but the total value of claims paid increased
  • 2.4.2. Insurers should emphasize the frequency of successful claims in order to increase engagement with CI insurance
  • 2.4.3. Mental health claims are the most expensive for IP products
  • 2.4.4. IP policies with a shorter-term payout limit the cost of claims

3. DISTRIBUTION DYNAMICS

• 3.1. The advisory channels still dominate product distribution
  • 3.1.1. The independent advice channel is still dominant but lost some ground in 2018
• 3.2. CI has seen continued growth in the non-advised channel
  • 3.2.1. The independent advice channel saw the number of CI contracts fall in 2018
  • 3.2.2. CI comparison sites will aid the advisory process

4. COMPETITOR DYNAMICS

• 4.1. The protection market is ruled by a small number of players
  • 4.1.1. Legal & General and Aviva dominate the CI market
  • 4.1.2. Aviva and Friends Life tie-up created a new market leader in the IP space
• 4.2. Competitor profiles for the leading CI and IP providers
  • 4.2.1. Legal & General’s CI product gives policyholders access to a number of additional benefits
  • 4.2.2. Legal & General’s IP product can be tailored to reduce premiums
  • 4.2.3. Aviva offers two types of CI products to consumers tailored for different circumstances
  • 4.2.4. Aviva’s Income Protection+ provides flexibility that allows product tailoring
  • 4.2.5. LV=’s CI product is only available as a rider alongside term life insurance
  • 4.2.6. LV= offers three main types of IP products to consumers
  • 4.2.7. Zurich launched a new protection platform in September 2018
  • 4.2.8. Vitality’s cover operates on a severity scale when assessing claims
• 4.3. The complexity of CI and IP products hinders uptake
  • 4.3.1. Hybrid CI and IP products may need to be developed
  • 4.3.2. The number of conditions offered by the top CI providers varies considerably

5. THE FUTURE MARKET

• 5.1. The number of new IP contracts is expected to fall post-2021
  • 5.1.1. IP premiums will rise slower than contracts from 2020-22
• 5.2. Both premiums and contracts will grow in the standalone CI market
  • 5.2.1. By 2024, the number of standalone CI contracts is forecast to be 27% higher than in 2018
• 5.3. Insurers will use technology to develop more personalized products
  • 5.3.1. Protection products will begin to incorporate the Internet of Things to change the focus to claims prevention
  • 5.3.2. Insurers will collect data from multiple channels
  • 5.3.3. Genome profiling could become widespread in the protection market
• 5.4. Digital services will be increasingly utilized
  • 5.4.1. AI will help to streamline the claims process
  • 5.4.2. Protection products will benefit from hybrid robo-advice
  • 5.4.3. Remote consultations should be standard

6. APPENDIX

• 6.1. Abbreviations and acronyms
• 6.2. Bibliography
• 6.3. Further reading