UK Protection Insurance 2024: Term Assurance
Summary
This report provides an in-depth assessment of the term assurance market, looking at current and historical market size with regards to changes in contracts and premiums. It examines how term assurance products are distributed and highlights key changes in the competitive landscape, as well as the propositions of the key market players. It provides five-year forecasts of market size in contracts and premiums to 2028. In addition, the report discusses how the market, distribution, and products offered are likely to change in the future, as well as the reasons for these changes.The term assurance market declined in 2023, with both premiums and contracts falling. This was driven by mortgage-related term assurance contracts and premiums, caused by a weak mortgage lending market due to the high mortgage rates present throughout the year. This made house purchases unaffordable for many individuals, especially with the cost-of-living crisis and inflation putting pressure on budgets.
Scope
- 41.2% of consumers are concerned about maintaining their current lifestyle amid the cost-of-living crisis.
- 31.4% of respondents are comfortable using AI-powered chatbots for policy-related issues, while 45.3% are not, indicating a degree of skepticism among individuals.
- Online/digital purchases of term assurance policies increased, with 61.3% of policies bought through digital channels in 2023-up by 1.7pp from 2022.
- Examine the size of the term assurance insurance market
- Identify the leading providers of term assurance
- Learn about the implications of the cost-of-living crisis on the market
- Understand the influence of a variety of factors on market growth
- Executive summary
- Background: The Protection Market
- Contracts in the protection market declined for a second year
- Term assurance shrinks in terms of contracts
- The advised channel leads the protection market
- The Term Assurance Market
- Term assurance continued to shrink in 2023
- Non-mortgage-related term increased its share of contracts in 2023
- The term assurance market shrank over the review period
- Mortgage-related term is dominated by advisors
- The advised channel leads non-mortgage-related distribution
- Market Drivers
- Mortgage lending fell in 2023, driving the decline in mortgage-related term
- Term assurance sales through the bank channel are falling
- The cost-of-living crisis and budgetary constraints will impact policies sold
- As the proportion of smokers decreases, the proportion of vapers is increasing
- Wearables and activity trackers offer a promising opportunity for life insurers
- The new Labour government may lead to Solvency II insurance capital being released
- AI chatbots can be leveraged to provide a seamless consumer experience
- Businesses are yet to start with the first Consumer Duty board report
- Product Launches and Innovation
- Pulse and 1Edge launch specialist life insurance for UK residents
- Guardian introduces Life Essentials targeting consumers looking for affordability
- Other partnerships and innovations
- Competitive Landscape
- L&G remains the leading provider of term assurance
- Table Term assurance market share by number of new contracts/lives insured, 2023
- Company Profile: Legal & General
- Company Profile: Aviva
- Company Profile: AIG
- L&G remains the leading provider of term assurance
- Forecasts
- The term assurance market will be hampered by high mortgage rates in 2024
- The term market is set to recover over 2026-28
- Embracing digitalization is essential to stay abreast of evolving consumer behaviors
- The cost-of-living crisis will continue to exert pressure on consumers
- Appendix
Research Assistance
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