United Kingdom (UK) Protection Insurance - Income Protection Market
Summary
The income protection (IP) market experienced strong growth in 2022, with high demand for the product amid the difficult economic climate, including the cost-of-living crisis. The independent advice channel dominates, with consumers continuing to seek out advice to better understand their coverage needs as well as find the best value option. Insurers have continued adapting and adjusting products during these changing times. Innovations have revolved around consolidating multiple IP products into a single, easy-to-understand product and partnering with protection panels to expand distribution networks.
The report provides an in-depth assessment of the income protection (IP) insurance market, looking at current and historical market size with regards to changes in contracts and premiums. It examines how IP products are distributed and highlights key changes in the competitive landscape, as well as the proposition of the key market players. The value of claims is also assessed. It 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.
Scope
- The IP market experienced strong growth in 2022. Contracts increased by 11.7% to 213,100 while premiums rose by 20% to GBP81 million.
- The independent advice channel dominates the IP market, with a 70.1% and 70.3% share of contracts and premiums. Consumers continue to seek out advice to better understand their coverage needs as well as find the best value option.
- Legal & General was the top provider of IP insurance in 2022 with a share of 27.4%. The top five accounted for 80.1% of the market.
- Examine the size of the income protection market
- Discover the leading providers of income protection in the UK market
- Learn about the impact of the cost-of-living crisis on income protection insurance
- Understand how the claims landscape is evolving
- Executive Summary
- Background: The Protection Market
- The protection market declined in 2022
- IP accounts for 10% of protection contracts
- IFAs make up the lion's share of the protection market
- The Income Protection Market
- The IP market experienced strong growth in 2022
- The independent channel dominates the IP market
- Both the value and number of IP claims rose in 2022
- The cost of mental illness claims continued to increase in 2022
- Market Drivers
- Insurers are improving their mental health capabilities to support consumers
- Private renters are a growing demographic in the UK
- Consumers appear to lack understanding of what their IP cover protects against
- The cost-of-living crisis is driving interest in IP products
- Universal Credit continues to count IP payouts as unearned income
- AI can be leveraged to enhance and streamline the value chain
- The Consumer Duty rules are designed to provide better customer outcomes
- Product Launches and Innovation
- Holloway Friendly launches new IP proposition
- Guardian launched a new IP proposition in 2023
- Other partnerships and innovations
- Competitive Landscape
- L&G retained its position as market leader in 2022
- Company Profile: Legal & General
- Company Profile: Aviva
- Company Profile: LV
- Forecasts
- The IP market is set to record consistent growth out to 2027
- IP contracts will grow across the forecast period
- The cost-of-living crisis is impacting the IP market
- The hybrid working model will have contrasting impacts on claims
- Self-employed individuals and the gig economy offer opportunities for insurers
- Appendix
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