UK Income Protection Insurance - Distribution Dynamics 2023

UK Income Protection Insurance - Distribution Dynamics 2023

Summary

This report explores how purchasing preferences have changed over time in the UK income protection insurance market. It discovers what is most influential to customers when purchasing an income protection policy and reveals the most popular providers in the market. New trends and innovations are highlighted, as well as the key factors that will influence the market over the next few years.

In 2023, price comparison websites (PCW) remained the preferred pre-purchase activity, as cited by 27.4% of respondents. Consumers favor PCWs due to the price being a prominent factor in their decision-making process. The proportions of consumers who visited their existing provider’s website and researched via broker/insurer websites increased compared to 2022. This suggests that consumers are seeking more detailed information from provider sites.

Scope

• The insurer channel was preferred among income protection (IP) insurance customers, accounting for 35.3% of sales in 2023. The channel’s share increased by 3.2 percentage points (pp) compared to 2022, while the share of second-placed brokers decreased by 6pp.
• Online purchasing continued to account for the majority of total purchases with a share of 53.7% in 2023. However, this share was down considerably from 2022, with PC/laptop purchases dropping by 4.9pp and smartphone/tablet purchases falling by 0.4pp.
• GlobalData’s 2023 UK Insurance Consumer Survey found that buying a house was a popular trigger for the purchase of IP insurance policies, as cited by 12.6% of respondents. A substantial proportion of protection policies are sold as a result of key events such as the cost-of-living crisis, concerns about job security, and reaching an age when having an IP policy was considered important.

Reasons to Buy

• Understand consumer purchasing decisions and how these will influence the income protection insurance market over the next few years.
• Improve customer engagement by recognizing what is most important to them and how insurers can adapt their products and services to meet their needs.
• Compare the Net Promoter Scores of key insurance providers.
• Discover which providers lead the way in the income protection insurance space and learn about new product innovations.
• Adapt your distribution strategy to ensure it still meets customer purchasing behavior.