Protection sales have bounced back during 2014 with income protection and independent advice leading the way. Gen Re's Jules Constantinou explains.
After the recent reports detailing the poor performance of the protection market in 2014 I have some great news!
2014 has bounced back ... and pretty much everywhere you choose to look.
Now the cynics out there will point to the fact that January 2013 was particularly quiet following the "huge" December that the market experienced off the back of the change to Gender Neutral rates and the imminent change to the I-E tax regime.
But the market was 7.5% up on 2013 over the quarter, with January and February particularly good and March also better than the corresponding period last year.
Is the independent advice market still trending down?
No, it doesn't look that way ...
In fact, Independent Advice was up almost 17.5%, whereas the Restricted Advice channel was down. The latter probably reflects the demise of bank tied channels over the period.
Another interesting trend that we thought is worth keeping an eye on the proportion of the market represented by the Non Advised channel, which appears to be growing slightly.
And finally, has the Cinderella of the market managed to reverse the negative performance of 2013?
Yes, it has ...
Income Protection has bounced back from all the recent bad press and off
the back of some product innovations has increased by 12.9%, although
disappointingly it is still less than 5% of the market.
Hopefully, the recent initiatives raising awareness and demonstrating the value of this benefit will continue this improving trend.
We are not entirely sure of the classification of the Critical Illness data between Accelerated and Stand Alone but overall this benefit was up almost 14%!
Finally, we thought it would also be worth keeping an eye on the development of the Mortgage related market in light of the imminent
changes being brought in by the Mortgage Market Review and the
Guaranteed Acceptance Whole of Life, which was the cornerstone of
growth in the protection market in the 2010-2012 period.
The Mortgage related slice of the market is currently around 32% of the
market by premium (33% by policy count) and the Guaranteed Acceptance
Whole of Life market is around 5% by premium (7.5% by policy count).
Jules Constantinou is regional manager: UK and Ireland at Gen Re Life UK Limited