United Kingdom (UK) Term Assurance (Protection Insurance) Market Size and Trends, Drivers, Product Launches and Innovation, Competitive Landscape, and Forecasts, 2022-2026
Summary
The Term assurance market grew by 7.0% to reach GBP551.9 million in new business premiums in 2021, showing a recovery from the contraction in 2020. Mortgage-related term assurance experienced the largest growth in 2021, with new contracts and business premiums recording increases of 10.8% and 11.9% respectively. The pandemic has highlighted the importance of digitalization. The sales process and claims process will require more digital integration to cope with changes in consumers’ attitude towards digital channels.
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. The value of claims is also assessed. It provides five-year forecasts of market size in contracts and premiums to 2026f. 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.
Scope
- The term assurance market grew by 7.0% to reach GBP551.9 million in new business premiums in 2021. The number of contracts grew by 4.8% to 1.7 million.
- Legal & General remains the largest player in the term assurance market with a 31.6% share of contracts sold in 2021.
- Term assurance dominates the protection market, accounting for 74.4% of contracts and 71.3% of new business premiums.
- Innovation is occurring in the form of platforms such as Anorak that make it easier for advisors to complete and submit online applications, track them in real-time, and create a policy start date all in one place.
- Examine the size of the term assurance market.
- Learn about the impact of legislation in the market.
- Understand the influence of a range of factors on growth.
- Executive summary
- Critical success factors
- Background: The Protection Market
- The protection market experienced growth in 2021 following the COVID-19 contraction
- Term assurance accounts for the largest share of the protection market
- Table Protection market: number of contracts (000s)
- Table Protection market: new business premiums (GBPM)
- The independent advice channel remains the largest as customers favor being fully advised
- Table Protection market: number of contracts (000s)
- Table Protection market: new business premiums (GBPM)
- The Term Assurance Market
- Home purchases and remortgaging drove growth in the term assurance market
- Non-mortgage-related policies account for over two thirds of term assurance contracts
- Contracts and new business premiums grew for all types of term assurance
- Table Term assurance: number of new contracts (000s)
- Table Term assurance: new business premiums (GBPM)
- The independent advice channel remains key to the distribution of mortgage-related term assurance
- Table Mortgage-related: new contracts (000s)
- Table Mortgage-related: new business premiums (GBPM)
- Independent advice dominates the distribution of nonmortgage related term assurance
- Table Non-mortgage-related: new contracts (000s)
- Table Non-mortgage-related: new business premiums (GBPM)
- The total value of claims paid in the term assurance market increased again in 2021
- Term assurance accounts for a dominant share of COVID-19-related claims value
- Market Drivers
- Mortgage lending has recovered following the 2020 downturn
- The UK could adopt a DORA equivalent, offering new opportunities for bancassurance
- Insurers see the same level of risk between vapors and smokers
- Some insurers offer discounts for policies that incorporate wearables
- Legislation is paving the way for the fight against climate change
- The FCA's Consumer Duty rules will encourage insurers to focus on customer needs
- Solvency II insurance capital rules are set to be relaxed in the UK
- Underwriting criteria loosens post-COVID-19
- Innovation around claims and underwriting focuses on faster solutions
- The push for greater innovation is focusing on agility and efficiency
- Product Launches and Innovation
- COVID-19 has resulted in increased demand for digital GP services
- Aviva offers DigiCare+ app to life protection customers
- Anorak boasts a fully automated life insurance advice platform
- Other product launches and innovations
- Competitive Landscape
- L&G remains the largest provider of term assurance The five largest term assurance providers
- Table Number of new term assurance contracts by insurer and market share, 2018–21
- Company profile: Legal & General
- Table L&G offers flexible terms
- Company profile: Aviva
- Company profile: AIG
- L&G remains the largest provider of term assurance The five largest term assurance providers
- Forecasts
- The term assurance market will show continuous slow growth following the bounce back experienced in 2021
- Term assurance is projected to keep on growing following the bounce back from COVID
- Improving customer experience and business operations will promote positive growth in the term assurance market
- Insurtechs and embedded insurance will become more prevalent in the industry
- Appendix
- Appendix
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