Income Protection - UK - February 2017

Income Protection - UK - February 2017

  • Mintel
  • March 2017
  • Wealth Management
  • 0 pages

Report Description


The need for workers to formally protect income is apparent, and yet the income protection gap is yawning. Many workers simply avoid trying to understand their financial resilience and their financial planning suffers as a result. Providers may be able to increase sales through group policies and by exploring the potential for direct online distribution. Education is still sorely needed, but traditional advice may not be the only way to deliver this.

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Table of Content


Executive Summary
The market
Individual premiums expected to show a steady increase
Figure 1: Forecast of new individual (long-term) income protection premiums – Fan chart, 2011-21
Advisers remain the leading distribution channel
Figure 2: Distribution of new individual (long-term) income protection contracts, by channel, 2014-16
Claims values are falling, supporting provider profitability
Companies and brands
LV= faces challenge from combined forces of Aviva and Friends Life
Figure 3: Estimated market shares of the top five providers of new individual income protection, based on volume sales, 2015
Providers invest in income protection products to enhance value
The consumer
One in ten adults has an income protection product
Figure 4: Protection product ownership, December 2016
A third of non-product holders say they can’t afford it and a third say they don’t need it
Figure 5: Reasons for not having protection products, December 2016
Two fifths say an absence from work of six months or less would leave them struggling
Figure 6: Expected impact of lost income on financial stability, December 2016
Two fifths intend to rely on savings if unable to work
Figure 7: Contingency plans if unable to work, December 2016
Covering home-related outgoings is the biggest priority
Figure 8: Interest in features of income protection cover, December 2016
‘Fix and flex’ approach favoured by potential customers
Figure 9: Interest in features of income protection products, December 2016
What we think

Issues and Insights
Group schemes can continue to expand the market for income protection
The facts
The implications
People are used to relying on contingency plans that lack certainty
The facts
The implications

The Market – What You Need to Know
New individual policies and premiums are on the up
Advisers remain the leading distribution channel
The economic environment is providing good foundations
New welfare rules may reduce the overall benefit of holding income protection

Success Stories

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