UK Critical Illness and Income Protection 2007

Publication Date	June 2007
Publisher	Datamonitor
Product Type	Report
Pages	45
ISBN Number	not applicable
Product Code	DAT05920

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Summary

Examines the markets for Critical Illness and Income Protection in the UK, looking at the relative sizes of the markets and assessing the future of these protection products

This report provides a comprehensive analysis of the individual Income Protection and individual Critical Illness Insurance markets
Assesses the factors that have driven these markets to their current levels and forecasts premium income growth in the individual protection market
Looks at the Income protection and Critical Illness markets in terms of new business, number of policies sold and distribution

In 2006, new business premiums in IP stood at GBP50m, compared to total CII sales of GBP287m. However, sales of stand-alone CII products were only valued at GBP36m in 2006, thus lower than IP sales. It is as a rider product that sales of CII are vastly outstripping IP.

The ABI is implementing changes which include a new standard description of CI to help ensure that consumers see a consistent explanation of the product; ensuring that, even if consumers do not read the full definitions, they will get a much clearer view about what is covered and what is not.

The Income Protection Taskforce has developed a series of recommendations including suggestions on improved underwriting, marketing and better enforcement of regulations

Provides historic and forecast data for the UK individual protection market.
Utilizes in-depth primary research to provide the answers to how the markets have arrived at the point they have and what the future holds.
Identifies areas and product features where and where development is needed if these products are to continue to survive.

Content

Overview
Catalyst
Summary
Methodology
Executive Summary
- Market Focus
- Sector Issues
- Competitor Issues
- Distribution Dynamics
- Market Focus
- This report examines the UK individual Income Protection and Critical Illness Insurance market
- Income Protection continues to play a niche role in the UK protection market
- Both CII and IP continue to see declining sales in terms of policy numbers
- Business in force is an important measurement of lapse rates in the market
- The total UK protection market is forecast to grow by a compound annual rate of 2.6% between 2007 and 2011
- Sector Issues
- The ABI introduced a new and improved Statement of Best Practice for Critical Illness Cover
- The Income Protection Task Force seeks to raise awareness about Income Protection Insurance
- Income protection has huge potential but is still a relatively complicated product
- Competitor Issues
- In CII, the top 5 players share more than 50% of the UK market among them
- In IP, the top 5 players share almost two-thirds of the UK market among them
- Providers try to adapt and enhance their products to meet regulator and customer needs
- Distribution Dynamics
- IFAs continue to dominate the income protection market
- After an initial surge, new business of critical illness through tied channels has declined since 2004
- Multi-tied financial advisors are forecast to seize a reasonable proportion of the income protection market over the next 5 years.
- IFAs will retain their dominance of the stand alone critical illness market
- Appendix
- Definitions
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
Table Of Figures
- Figure 1: Income Protection continues to play a niche role in the UK protection market
- Figure 2: Accelerated and standalone CII policies have both been experiencing poor sales performances
- Figure 3: Individual IP sales saw further declines in 2005 but not as strong as a year earlier
- Figure 4: Income protection new business vs business in force
- Figure 5: Critical Illness new business vs business in force
- Figure 6: New business in stand-alone critical illness products is forecast to increase by a compound annual rate of 5.7%.
- Figure 7: In CII, the top 5 players share more than 50% of the UK market among them
- Figure 8: In IP, the top 5 players share almost two-thirds of the UK market among them
- Figure 9: Bancassurers have lost a significant proportion of market share in the income protection market
- Figure 10: Single ties sales of Critical illness have declined since 2004
- Figure 11: Multi-tie financial advisors are forecast to make inroads into the income protection market between 2007 and 2011
- Figure 12: Independent advisors will retain their majority share of the critical illness market
Table Of Tables
- Table 1: New business premiums in individual protection, 2002-2006, m APE
- Table 2: Total number of premium sales for individual IP and individual CI policies, 2002-2005
- Table 3: Income protection new business vs business in force 2001-2005
- Table 4: Critical Illness new business vs business in force, 2001-2005 m
- Table 5: Forecast individual protection products 2007-2011, m
- Table 6: Top 5 players in the CII market in terms of numbers of policies sold in 2005 and previous ranking
- Table 7: Top 5 players in the IP market in terms of numbers of policies sold in 2005 and previous ranking
- Table 8: Income protection distribution 2002-2006, m APE
- Table 9: Stand alone Critical illness distribution 2002-2006, m APE
- Table 10: Forecast income protection distribution 2007-2011, m APE
- Table 11: Forecast stand alone critical illness distribution 2007-2011, m APE