866-997-4948(US-Canada Toll Free)

Term Assurance - UK - June 2017

Published By :

Mintel

Published Date : Jul 2017

Category :

Insurance

No. of Pages : N/A

Sales of term assurance rose in 2016, as the market is starting to see more innovation across new product types, distribution channels and underwriting. However, life insurance continues to be low down in consumers’ list of priorities, making it hard for insurers to engage with potential customers.

Table of Content

OVERVIEW
What you need to know
Products covered in this Report

EXECUTIVE SUMMARY
The market
Premiums rise by 2% in 2016
Figure 1: New individual term assurance sales and average annual premium, 2012-16
Term assurance market forecast to grow
Figure 2: Forecast of new individual term assurance contracts – Fan chart, 2012-22
Figure 3: Forecast of new term assurance premiums – Fan chart, 2012-22
Non-advised protection sales grow
Figure 4: Share of new term assurance business (contracts), by channel, 2016
Over half have less than £5,000 in savings and investments
Companies and brands
Legal & General remains the largest life insurer, despite M&A activity
Figure 5: Top five providers of individual term assurance, by sales volumes, 2015 and 2016
Investing in technology is a strategic priority
Prevention rather than payouts
Life assurance advertising spend grows by 5%
Figure 6: Total above-the-line, online display and direct mail advertising expenditure on life protection (including term assurance), 2012/13-2016/17
The consumer
Less than a third hold life insurance
Figure 7: Insurance product ownership, April 2017
Term assurance is the most commonly held type of policy
Figure 8: Type of life insurance product(s) owned, April 2017
Low levels of cross-selling in the life insurance market
Figure 9: Other products held with life insurance provider, April 2017
Price comparison websites used as a benchmark for costs
Figure 10: Sources when looking for information on a new or existing life insurance policy, April 2017
Cash benefits attract most interest
Figure 11: Interest in additional life insurance benefits, April 2017
Short-term goals take financial priority over life insurance
Figure 12: Current financial priorities, April 2017
Only a quarter would be willing to share their data
Figure 13: Interest in data sharing to influence the cost of life insurance premiums, April 2017
What we think

ISSUES AND INSIGHTS
Growth of non-advised sales could affect cover levels
The facts
The implications
Cost-saving factor is key when deciding to share data
The facts
The implications
Younger consumers more likely to be interested in healthy living benefits
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Premiums rise by 2% in 2016
Term assurance market forecast to grow
Non-advised protection sales grow
Over half have less than £5,000 in savings and investments

MARKET SIZE AND FORECAST
Market returns to growth
Figure 14: New individual term assurance sales and average annual premium, 2012-16
Number of in-force policies falls for the fourth time in 2015
Figure 15: Number of individual term and whole-of-life assurance policies in force, 2008-15
Market forecast
Term assurance market forecast to grow
Figure 16: Forecast of new individual term assurance contracts – Fan chart, 2012-22
Figure 17: Forecast of new individual term assurance contracts – Fan chart, 2012-22
Figure 18: Forecast of new term assurance premiums – Fan chart, 2012-22
Figure 19: Forecast of new term assurance premiums, 2012-22
Forecast methodology

MARKET SEGMENTATION
Protection term assurance accounts for 65% of new contracts
Figure 20: Volume of new individual regular-premium term assurance policy sales, by policy type, 2012-16
Mortgage term policies cover higher values
Protection term policies are mostly level cover
Figure 21: Summary of new term assurance business, by type of policy, 2016
Critical illness cross-selling rates are higher for mortgage term assurance
Figure 22: Critical illness rider benefits as a proportion of new individual term assurance business and new standalone critical illness business, 2012-16

CHANNELS TO MARKET
Mortgage term market moving away from advice
Has the decline in bancassurance sales stopped?
Figure 23: Distribution of new mortgage term assurance business, by channel, 2015 and 2016
Independent advice more prominent in protection sales
Figure 24: Distribution of new protection term assurance business, by channel, 2015 and 2016
Non-advised protection sales grow

MARKET DRIVERS
Over half have less than £5,000 in savings and investments
Figure 25: Value of savings and investments, April 2017
Growth in FTB mortgagers presents opportunities for sales
Brexit will impact demand for cover
Figure 26: Volume of new mortgages, by purpose, not seasonally adjusted, 2012-16
Claims paid transparency will give people confidence
Figure 27: Number of claims and claims paid for term assurance policies, 2014-16

COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Legal & General remains the largest life insurer, despite M&A activity
Investing in technology is a strategic priority
Prevention rather than payouts
Life assurance advertising spend grows by 5%

MARKET SHARE
Legal & General remains the largest life insurer, despite M&A activity
Royal London sales set to continue rising
Figure 28: Top five providers of individual term assurance, by sales volumes, 2015 and 2016

COMPETITIVE STRATEGIES
Investing in technology
Aviva merges businesses to focus on online
Robo life insurance
Instant term assurance
Let me take a selfie
People-first policies
Tailored policies serve the under-served
Prevention rather than payouts

ADVERTISING AND MARKETING ACTIVITY
Life assurance advertising spend grows by 5%
Figure 29: Total above-the-line, online display and direct mail advertising expenditure on life assurance products, 2012/13-2016/17
Specialist providers are the biggest spenders
Figure 30: Top 10 advertisers of (term) life insurance, 2015/16 and 2016/17
Vitality focusses on health and wellbeing
Figure 31: Vitality focusses on health and wellbeing with Ambassadors Joe Root, Maro Itoje, Ellie Simmonds and Jessica Ennis-Hill
TV advertising attracts highest proportion of spend
Figure 32: Proportional distribution of (term) life advertising expenditure, by media type, 2015/16 and 2016/17
Nielsen Ad Intel coverage

THE CONSUMER – WHAT YOU NEED TO KNOW
Less than a third hold life insurance
Low levels of cross-selling in the life insurance market
Price comparison websites used as a benchmark for costs
Cash benefits attract most interest
Short-term goals take financial priority over life insurance
Only a quarter would be willing to share their data

INSURANCE PRODUCT OWNERSHIP
Less than a third hold life insurance
Figure 33: Insurance product ownership, April 2017
45-54-year-olds most likely to hold life insurance…
…but there are opportunities to increase cover among younger groups
Figure 34: Life insurance ownership, by age, April 2017
Opportunities to extend cover among women
Private renters are least likely to have cover
Figure 35: Life insurance ownership, by housing situation, April 2017
No cover and no savings
Figure 36: Value of savings and investments, by life insurance ownership, April 2017

TYPE OF LIFE INSURANCE
Term assurance is the most popular form of life insurance
Figure 37: Type of life insurance product(s) owned, April 2017

CROSS-SELLING IN THE LIFE INSURANCE MARKET
Low levels of cross-selling in the life insurance market
Figure 38: Other products held with life insurance provider, April 2017
Convenience drives cross-selling among 18-44-year-olds
Figure 39: Other products held with life insurance provider, April 2017
7% hold critical illness with another provider

RESEARCHING LIFE INSURANCE
Price comparison websites used as a benchmark for costs
Open banking could provide opportunities for protection market
Figure 40: Sources when looking for information on a new or existing life insurance policy, April 2017
People without cover will appreciate face-to-face contact
Figure 41: Sources when looking for information on a new or existing life insurance policy, by life insurance ownership, April 2017

LIFE INSURANCE BENEFITS
Cash benefits attract most interest
Figure 42: Interest in additional life insurance benefits, April 2017
Young people more likely to engage insurers with their lifestyle goals
Aligning goals will lead to higher levels of retention
Figure 43: Interest in additional life insurance benefits, by age, April 2017
Choice of benefits is important

FINANCIAL PRIORITIES
Short-term benefits take financial priority
Figure 44: Current financial priorities, April 2017
Only a quarter of parents prioritise ensuring financial security for their family
Figure 45: Current financial priorities, by parental status of children living in the household, April 2017
People have other ways of ensuring financial security
Figure 46: Current financial priorities, by life insurance ownership, April 2017
Flexible policies are key for potential movers
Figure 47: Current financial priorities, by type of life insurance owned, April 2017

DATA SHARING WITH LIFE INSURANCE PROVIDERS
Only a quarter would be willing to share their data
Figure 48: Interest in data sharing to influence the cost of life insurance premiums, April 2017
Insurers need to be transparent about the use and security of data
18-34-year-olds most interested in sharing their data
Figure 49: Interest in data sharing to influence the cost of life insurance premiums, by age, April 2017
Existing policyholders more likely to be interested
Figure 50: Interest in data sharing to influence the cost of life insurance premiums, by life insurance product ownership, April 2017
Half of term assurance holders are interested
Figure 51: Interest in data sharing to influence the cost of life insurance premiums, by type of life insurance owned, April 2017

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

APPENDIX – MARKET SIZE AND FORECAST
Figure 52: Additional best- and worst-case forecast table for term assurance premiums, 2017-22
Figure 53: Additional best- and worst-case forecast table for term assurance volume sales, 2017-22
Forecast methodology

List of Table

NA

Make an enquiry before buying this Report

Please fill the enquiry form below.

  • Full Name *
  • Your Email *
  • Job Title
  • Company
  • Phone No. * (Pls. Affix Country Code)
  • Message
  • Security Code *