United Kingdom (UK) Protection Insurance - Critical Illness Market
Summary
This report provides an in-depth assessment of the critical illness insurance market, looking at current and historical market size with regards to changes in contracts and premiums. It examines how critical illness products are distributed and highlights notable changes in the competitive landscape, as well as the propositions of key market players. The value of claims is also assessed. The report provides five-year forecasts of contracts and premiums to 2027 and discusses how the market, distribution, and products offered are likely to change in the future (as well as the reasons for these changes).
In 2022, the number of contracts in the standalone critical illness market decreased by 4.2% to 70,600. Meanwhile, premiums increased by 18.2% to GBP28.7 million. Critical illness as a rider for term assurance saw contracts decrease by 5.9% and premiums fall by 2% in 2022. Legal & General (L&G) was the top provider of critical illness insurance in 2022 with a market share of 21.8% for all contracts sold (both standalone and as a rider).
Scope
- The cost-of-living crisis has impacted consumer behavior, with some individuals canceling policies. As a result, insurers should look to come up with more affordable or flexible policies.
- Insurers should look to improve their underwriting capabilities to include those that have chronic conditions, such as Type 2 diabetes. Given that this market is relatively untapped, it opens up the possibility for growth.
- Consumers have been shifting towards the purchase of insurance online, sped up by the pandemic’s impact on digital adoption. The life insurance sector has generally been behind on digitalization; however, shifting consumer dynamics should act as a catalyst for insurers to improve their digital capabilities.
- Examine the size of the standalone critical illness insurance market
- Identify the leading providers of critical illness
- 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
- The protection market declined in 2022
- Standalone critical illness has the smallest share of premiums
- Table However, the segment's share of premiums rose from 3.1% in 2021 to 3.7% in 2022
- IFAs make up the lion's share of the protection market
- Table Restricted channel premiums rose by 52% in 2022
- The Critical Illness Market
- Critical illness contracts decreased by 4.2% in 2022
- The rider market is much larger than standalone critical illness
- The independent advice channel grew substantially in 2022
- Table The independent advice channel recorded substantial growth over the review period
- The value and number of critical illness claims rose in 2022
- Cancer dominates the critical illness claims environment
- Table Cancer accounted for 65.4% of the number of claims and 67.2% of value in 2022
- Market Drivers
- Insurers cover a variety of illnesses to target a greater number of customers
- Mortgage lending has remained consistent despite economic struggles
- Increased organ availability in the UK could benefit critical illness providers
- Post-COVID impacts to the protection market
- AI can be leveraged to enhance and streamline the value chain
- The Consumer Duty rules are designed to provide better customer outcomes
- Digitalization is crucial to keep up with changing consumer dynamics
- Product Launches and Innovation
- Vitality introduced a new serious illness proposition
- HSBC Life extends its critical illness offering to diabetics
- Other partnerships and innovations
- Competitive Landscape
- L&G holds a fifth of the critical illness market
- Table However, its market share contracted over the review period
- Company Profile: Legal & General
- Company Profile: Aviva
- Company Profile: AIG
- L&G holds a fifth of the critical illness market
- Forecasts
- The critical illness market is set to grow continuously until 2027
- Standalone critical illness will record strong growth out to 2027
- Willingness to share genetic testing results differs between customers
- The cost-of-living crisis will put pressure on the number of policies sold
- The NHS backlog continues to increase in 2023
- Embedded insurance could boost the number of contracts in the market
- Appendix
- About GlobalData
Research Assistance
Download our eBook: How to Succeed Using Market Research
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.
Download eBook