MarketResearchReports.Biz
announces addition of new report "UK Protection Insurance 2017:
Critical Illness & Income Protection" to its database.
"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 Contents
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
4.1. The injury and illness protection market is dominated by a few
players 36
4.1.1. Legal & General dominates the critical illness market by
number of contracts 36
4.1.2. LV= and Friends Life account for half of new IP sales 36
4.1.3. Innovation and technology is driving competition and will
decide who wins 37
4.2. The CII market is trying to cover more conditions at a cheaper
rate 38
4.2.1. Choosing how many conditions to cover is a cause for debate
for critical illness insurers 38
4.2.2. AIG Life has launched a CII product that only covers for
cancer, heart attack, and stroke 39
4.3. Legal & General leads the critical illness market 39
4.3.1. Legal & Generals CII has a range of benefits at no
additional cost 39
4.3.2. Legal & Generals IP product has a range of options to
reduce premiums 39
4.4. Friends Life is now part of the Aviva Group 40
4.4.1. Friends Life will move under the Aviva brand in October 2017
40
4.4.2. Avivas and Friends Lifes new critical illness product offers
three tiers of cover 41
4.4.3. Avivas and Friends Lifes new IP policy allows advisors to
flexibly design cover 41
4.5. LV= leads the IP market 42
4.5.1. LV= offers a specialist IP policy for doctors and surgeons 42
4.5.2. LV=s critical illness product is only available as a rider
alongside its term life insurance policy 42
4.5.3. LV= and Allianz are combining to form a joint venture in
general insurance 42
4.5.4. LV= is looking to develop its rehabilitation services to aid
the recovery of claimants 42
4.6. Royal London offers its Helping Hand support service to
customers 43
4.6.1. Royal Londons IP customers can choose when payouts start and
how long they last 43
4.6.2. Royal Londons CII covers 43 definitions and 14 additional
conditions 43
4.6.3. Royal London has removed the age limit for its IP product 43
4.7. Vitality works to differentiate itself from other players 43
4.7.1. Vitalitys IP customers can benefit from rewards and discounts
43
4.7.2. Vitalitys serious illness payouts are based on severity,
allowing it to cover more conditions 44
5. THE MARKET GOING FORWARD 46
5.1. The CII and IP markets are forecast to grow to 2021 46
5.1.1. The IP market is forecast to grow by 17.0% from 2016 to 2021
46
5.1.2. IP and CII policies can reduce Universal Credit payments,
outweighing their value 47
5.1.3. The standalone critical illness market is forecast to grow by
11.5% from 2016 to 2021 48
5.1.4. Protection providers want government help to promote IP and
CII 50
5.2. Policies are becoming personalized 51
5.2.1. Wearable healthcare technology is assessing individual risk 51
5.2.2. Genomic profiling could be used to assess risk in the future
51
5.2.3. Personalization could create an uninsurable underclass 52
5.2.4. Specialist policies for existing conditions could enter CII
and IP 52
5.3. Providers want to actively help individuals manage their health
52
5.3.1. Providers could offer wearable technology that diagnoses and
manages medical conditions 52
5.3.2. Facial analytics is being developed to detect early signs of
disease 53
5.3.3. Aviva is investing in companies helping to protect and prevent
against injury and illness 53
5.3.4. Rehabilitation and support services are helping customers get
back to work 53
5.3.5. Wellbeing apps are being launched 54
5.3.6. Providers are launching digital healthcare and virtual GP
services 54
6. APPENDIX 56
6.1. Abbreviations and acronyms 56
6.2. Bibliography 56
6.3. Further reading 57
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