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WHOLE-OF-LIFE INSURANCE - UK - JULY 2018

Published By :

Mintel

Published Date : Jul 2018

Category :

Insurance

No. of Pages : N/A

The whole-of-life market has experienced a difficult period over the past five years but there are signs that this may be coming to an end. A large portion of over-50s have little in the way of savings, providing an opportunity for insurers to provide a cheap route to providing security for dependents. If providers are able to provide innovative new products, whilst simultaneously adapting their advertising campaigns to the increasingly youthful minded over-50s, the market could be set for a return to growth.

Table of contents
OVERVIEW
What you need to know
Report scope and definition
EXECUTIVE SUMMARY
The market
New premiums fell to £96 million in 2017
Figure 1: Forecast for total value of new whole-of-life premiums, 2013-2023
85% of all sales in 2017 were made without advice
Figure 2: Whole-of-life and guaranteed acceptance sales channels, 2016 and 2017
Companies and brands
SunLife is the biggest provider of whole-of-life insurance
Figure 3: Market share of top five product providers, measured by new individual whole-of-life sales*, 2017
The consumer
Confusion over product ownership
Figure 4: Life insurance product ownership, April 2018
Direct mail an unpopular route to ownership
TV advertising dominates in guaranteed acceptance market
Figure 5: Sources used when choosing life insurance policy, by product ownership, April 2018
Over-50s’ online usage growing
Figure 6: How over-50s arranged their life insurance policy, by age, April 2018
Low payments and guaranteed payback schemes are the most appealing features
Figure 7: Interest in new whole-of-life features, by age, April 2018
Under-55s more likely to have other spending priorities
Figure 8: Reasons for not holding a life insurance policy, by age, April 2018
What we think
ISSUES AND INSIGHTS
Reinvigorate advertising to increase ownership
The facts
The implications
Significant innovation needed
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
New premiums fell to £96 million in 2017
Guaranteed acceptance plans account for 84% of policies
85% of all sales in 2017 were made without advice
Over-50s market continues to grow
MARKET SIZE AND FORECAST
Period of decline continues…
Figure 9: Whole-of-life and guaranteed acceptance new contracts and premiums, 2013-17
…but the whole-of-life market is set for recovery
Figure 10: Forecast for total value of new whole-of-life premiums, 2013-23
Figure 11: Forecast for total value of new whole-of-life premiums, 2013-23
Forecast methodology
MARKET SEGMENTATION
Guaranteed acceptance plans account for 84% of policies
Underwritten market indicates end of significant decline
Figure 12: New contract distribution, by product type, 2013-17
Underwritten premiums fall below guaranteed acceptance
Figure 13: Value of new whole-of-life and guaranteed acceptance premiums, 2013-2017
CHANNELS TO MARKET
Non-advised underwritten whole-of-life sales outstrip independent advice sales for the first time.
Figure 14: Whole-of-life and guaranteed acceptance sales channels, 2016 and 2017
Advisers still play a key role
Figure 15: Sources used when choosing most recent life insurance policy, April 2018
Direct mail an inefficient use of advertising spend
MARKET DRIVERS
Over-50s population continues to grow
Figure 16: Population projections, 2017-40
Over 65s feeling more secure…
Figure 17: Consumers’ current financial situation, by age, march 2018
…and more optimistic for the future
Figure 18: Consumers’ current financial situation, by age, march 2018
Whole-of-life insurance can help those with little savings
Figure 19: Value of savings and investments, by age, March 2018
REGULATORY AND LEGISLATIVE CHANGES
Inheritance tax changes yet to come into fruition
Introduction of property related allowance could impact market
New insurance regulation adds clarity to an ‘advised’ sale
Companies forced to adapt to GDPR
Government makes reforms to Funeral Payments
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
SunLife is the biggest provider of whole-of-life insurance
Whole-of-life policies continue to expand reach and flexibility
Despite difficulties, adspend continues to increase
Over-50s life insurance adspend increased by 8% in 2017/18
MARKET SHARE
SunLife retains market dominance
Figure 20: Top five product providers, measured by new individual whole-of-life sales*, 2016 and 2017
One Family enters top 5
COMPETITIVE STRATEGIES
Gift cards still central to strategy for major players
Lowest available premiums continue to tumble
AIG and Zurich focus on speed of delivery
Serious illness cover the selling point for Vitality, Royal London and One family.
British Seniors introduces new ‘Cash in’ option
New entrants to utilise Open Banking
ADVERTISING AND MARKETING ACTIVITY
Over-50s life insurance adspend increased by 8% in 2017/18
Figure 21: Total above-the line, online display and direct mail advertising expenditure on life Insurance Products 2015/16-2017/18
SunLife is the highest-spending advertiser
Figure 22: Total Above- the line, online display and direct mail advertising expenditure for top 10 advertisers of over-50s life insurance, 2015/16-2017/18
Top four all increased adspend
TV and direct mail dominate advertising
Figure 23: Total above-the line, online display and direct mail advertising of over-50s life insurance, by media type, 2017/18.
Other advertising activity
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Confusion over product ownership
Funeral plans a decreasing factor for policy owners
Over-50s’ online usage growing
Low payments and guaranteed payback schemes are the most appealing features
Under-65s more likely to have other spending priorities
LIFE INSURANCE OWNERSHIP
A fifth of over-50s own some form of whole-of-life insurance
Figure 24: Life insurance product ownership, April 2018
Consumers appear confused about what type of policy they have
New innovation may cause further confusion
Higher earners more likely to have underwritten whole-of-life cover
Figure 25: Product ownership, by household income, April 2018
REASONS FOR PURCHASE
Dependents the priority for whole-of-life policyholders…
Figure 26: Life insurance purchase triggers, by product ownership, April 2018
…but funeral plans a decreasing factor since 2016
Figure 27: Consumers’ reasons for purchasing life insurance, 2016 and 2018
PURCHASE JOURNEY
Face-to-face the preferred method when arranging a policy
Online usage set to increase for over-50s market
Figure 28: How over-50s arranged their life insurance policy, by age, April 2018
INTEREST IN POLICY FEATURES
Low payments and guaranteed payback schemes are the most appealing features
British Seniors guaranteed payback is no more
Figure 29: Interest in new whole-of-life features, by age, April 2018
Retirees need convincing
Figure 30: Interest in new whole-of-life features, by employment status, April2018
Non-financial benefits are unpopular among non-policy holders
Figure 31: Interest in new whole-of-life features, by life insurance ownership, April 2018
BARRIERS TO OWNERSHIP OF LIFE INSURANCE
Under-55s more likely to have other spending priorities…
Figure 32: Reasons for not holding a life insurance policy, by age, April 2018
…while a quarter of over-65s have made other plans
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Best case and worst case forecast for total value of whole-of-life market
Figure 33: Best-and worst-case forecast for total value of new whole-of-life premiums
Forecast methodology

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