"It’s encouraging to see that so many people recognise that IP and CI are an important part of financial planning."
- Yvonne Braun, Director of Policy, Long Term Savings, Health & Protection at the ABI
Overall, the Association of British Insurers (ABI) found that sale of individual contracts in 2023 - including Term Insurance, Critical Illness (CI), Income Protection (IP), Whole of Life (WOL), Relevant Life Plans, and Business Protection – fell to its lowest figure since 2018.
Only 1.5mn Term Assurance policies were sold, sitting lower than in 2017. Non mortgage-related assurance sales also fell by 8% after previously reporting stronger figures. Meanwhile, mortgage-related term sales have reduced by 10% year-on-year with less than 450k policies sold.
However, there was a 16% rise in IP polices, with 247k sales in 2023. Nearly all (97%) individual IP policies were sold with advice, highlighting the important role advisers must play. The ABI said added-value services have also helped people return to work after ill-health or injury.
CI sales have increased by 7% since 2022 – that’s almost four times higher than it was ten years ago.
“Financial resilience - the ability to withstand a financial shock – is a hugely important issue. It’s encouraging to see that so many people recognise that IP and CI are an important part of financial planning and play a crucial role in providing a financial safety net,” said Yvonne Braun, Director of Policy, Long Term Savings, Health & Protection at the ABI.
Responding to these figures, Setul Mehta, Head of Intermediary Distribution at AIG Life, said this growth proves that there’s “customer demand - and need – for IP.” Therefore, he thinks it’s “important we continue to work together as an industry to build consumer trust by making sure IP products are easily understood, support their health before illness strikes, and as early as possible through rehabilitation, to give customers better outcomes.”
Peter Sanderson, Head of Operations for Retail Protection at Zurich Insurance, highlighted that economic uncertainty has educated families on the need to safeguard their finances, while the Pandemic has underscored the necessity of protecting against ill-health or injury in the future. "Both these factors have contributed to an increased demand for IP products [...] providers are also making it easier for advisers to group multiple products in one package, allowing for a broader level of coverage," Peter explained.
Likwise, Jo Miller, Co-Chair of the Income Protection Taskforce (IPTF), said she's "delighted to see growth in the IP market and recognise the important role that advisers play in driving that growth." Jo believes this has been triggered by a number of factors, including "recognition of the need for financial resilience following the Pandemic and focus on avoiding foreseeable harm that Consumer Duty brings."
"IPTF will continue to work to support this market growth given the importance of financial resilience for wider society," she concluded.
