Description
Stay ahead of the curve and future-proof your business with Mintel’s UK Term Assurance Market Report 2023. Our full report is packed with consumer-led market intelligence, the latest UK term assurance market research, trends and consumer behaviours affecting your business. Get a 360° view of the UK term assurance market, including market size, share and forecasted growth to help you align your business strategy with the needs of your audience.
Below, we’ve handpicked the key insights analysed in the full report and summarised the core topics.
Topics Analysed in this Report
- Trends in market segmentation, channel distribution and claims experience.
- Overview of consumer ownership and interest in taking out term assurance.
- Examining the barriers to taking out life insurance.
- Understanding what additional benefits would encourage consumers to take out life insurance.
- Analysis of how the cost of living crisis is impacting the UK term assurance market.
UK Term Assurance Market: Overview
The number of new term assurance subscribers will remain subdued. While interest remains high and the cost of living crisis will continue to limit consumers willing to take out cover. The slowdown housing market will also suppress demand for mortgage-term sales. Despite this decline, new premiums are expected to remain flat, mainly due to hiugher prices.
- UK term assurance market size: Mintel forecasts that sales volumes will start to recover in 2024, reaching 1.85 million new contracts in 2028.
UK Term Assurance Market: Challenges and Opportunities
Demand for clarity
Life insurance products can be complex, with various types having distinct features, benefits, and limitations. Over half of adults think it’s difficult to understand the different types of life insurance products. This suggests that there is a clear need for simplified and clear explanations of the different types of life insurance policies.
- UK term assurance market challenge: 58% of adults think it’s difficult to understand the different types of life insurance products.
The growing potential of the C2C market
Consideration of life insurance remains higher than pre-pandemic, particularly among Millennials. This suggests that providers have an opportunity to engage consumers at an earlier stage with more affordable options, in addition to providing educational campaigns about the benefits of life insurance.
- UK term assurance market opportunity: 54% of adults aged 18-34 without life insurance say they are likely to consider taking out life insurance.
Purchase our UK Term Assurance Market Report to receive a five-year forecast, consumer behaviour analysis, and recommendations for market opportunities. Readers of this report may also be interested in our UK Home Insurance Market Report 2023.
Leading Brands in the UK Term Assurance Market
Legal & General, Aviva, AIG, Royal London, Vitality.
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Expert Insights from a Finance Analyst
This report, written by Stefania Apostol, a leading research analyst, delivers in-depth commentary and analysis to highlight trends in the UK term assurance market and add expert context to the numbers.
Term assurance sales contracted in 2022, and the outlook remains challenging as the cost of living crisis continues to place pressure on household finances. This makes consumers more focused on immediate financial needs, which take precedence over long-term protection. Nonetheless, consideration of life insurance remains higher than pre-pandemic, and providers have an opportunity to engage consumers at an earlier stage.”
Stefania Apostol
Senior Financial Services Analyst
Table of Contents
-
Overview
- Key issues covered in this Report
- Products covered in this Report
-
Executive Summary
- The five-year outlook for term assurance
- Figure 1: Category outlook, 2023-28
- The market
- Term assurance sales are expected to decline further in 2023
- Figure 2: Market size for term assurance, 2018-23
- The market to recover as inflationary pressures ease
- Figure 3: Market forecast for term assurance new premiums, 2018-28
- Mortgage term sales are expected to continue to decline…
- Figure 4: Volume and value of new individual term assurance policy sales – mortgage-related sales, 2014-23
- …while the other term market is likely to be more resilient
- Figure 5: Volume and value of new individual term assurance policy sales – other-term sales, 2014-23
- Companies and brands
- Legal & General continues to dominate the term assurance market
- Vitality becomes the fifth-largest provider, overtaking Zurich
- Figure 6: Top five providers, measured by new term assurance sales, with and without critical illness, 2021-22
- Insurers support customers during the cost of living crisis
- The consumer
- Market shows resilience in ownership levels
- Figure 7: Protection insurance product ownership, 2022-23
- Term assurance is the most popular type of life insurance
- Figure 8: Type of life insurance product owned, 2023
- Consideration of life insurance is still higher than pre-pandemic
- Figure 9: Consideration of life insurance, 2019-23
- A lack of affordability is the top reason for not having cover
- Figure 10: Barriers to life insurance, 2023
- Medical services have a strong appeal as an additional benefit
- Figure 11: Interest in additional benefits, 2023
- The cost of living crisis has made life insurance less of a priority
- Figure 12: Behaviours towards life insurance, 2023
- The five-year outlook for term assurance
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Issues and Insights
- The cost of living crisis poses multiple challenges for the market…
- …but opportunities remain to encourage consumers to take out life insurance
- Improve understanding of different types of life insurance
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Market Size and Performance
- There is a large protection gap
- New term assurance sales contracted in 2022…
- …and are expected to decline further in 2023
- Figure 13: Market size for term assurance, 2018-23
-
Market Forecast
- The five-year outlook for term assurance
- Figure 14: Category outlook, 2023-28
- New contracts to recover as inflationary pressures ease
- Figure 15: Market forecast for term assurance new contracts, 2018-28
- Figure 16: Market size and forecast for term assurance new contracts, 2018-28
- Value of term assurance forecast to reach almost £602 million by 2028
- Figure 17: Market forecast for term assurance new premiums, 2018-28
- Figure 18: Market size and forecast for term assurance new premiums, 2018-28
- Learnings from the last income squeeze
- Figure 19: New individual term assurance sales and average annual premiums, 2008-14
- Forecast methodology
- The five-year outlook for term assurance
-
Market Segmentation
- Mortgage term sales are expected to continue to decline…
- Figure 20: Volume and value of new individual term assurance policy sales – mortgage-related sales, 2014-23
- …while the other term market is likely to be more resilient
- Figure 21: Volume and value of new individual term assurance policy sales – other-term sales, 2014-23
- Average premiums rise
- Figure 22: Average premiums for new individual term assurance policy sales, by policy type, 2014-22
- Mortgage term sales are expected to continue to decline…
-
Channels to Market
- Advised sales account for 90% of the mortgage term…
- Figure 23: Distribution of new contracts for mortgage-related term assurance, by channel, 2018-22
-
- Figure 24: Number of new contracts for mortgage-related term assurance, by channel, 2018-22
- …and 83% of other term assurance
- Figure 25: Distribution of new contracts for other term assurance, by channel, 2018-22
- Figure 26: Number of new contracts for other term assurance, by channel, 2018-22
- Bancassurance sales remain low
- Figure 27: Proportion of new term assurance premiums sold through bancassurance, 2018-22
- Advised sales account for 90% of the mortgage term…
-
Claims Experience
- The number of claims paid increased by 18% in 2022
- Figure 28: Claims paid for term assurance policies, 2015-22
- Insurer-published claims stats
- The number of claims paid increased by 18% in 2022
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Market Drivers
- Inflation is expected to fall…
- Figure 29: CPI and CPIH, 12-month rates, 2016-23
- …but most people are still feeling the effects of higher prices
- Figure 30: Issues faced in the last two months, 2023
- Consumers’ financial wellbeing starts to recover
- Figure 31: Household financial wellbeing index, 2016-23
- Property transactions slow
- Figure 32: Number of property transactions completed in the UK with value of £40,000 or above, 2017-23
- The proportion of renters rises
- Figure 33: English housing stock, by tenure (proportions), 2017/18-2021/22
- Inflation is expected to fall…
-
Regulatory and Legislative Changes
- FCA introduces new Consumer Duty rules
- Life insurance providers need to consider how to meet needs throughout the policy term…
- …and how to improve customer understanding
-
Market Share
- Legal & General continues to dominate the term assurance market
- Aviva and AIG increased their market share
- Royal London’s market share declined
- Vitality overtook Zurich
- Figure 34: Top five providers, measured by new term assurance sales, with and without critical illness, 2021-22
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Competitive Strategies
- Insurers support customers during the cost of living crisis
- Canada Life withdraws from the UK’s consumer protection market
- Royal London acquires Aegon UK’s individual protection business
- PensionBee launches protection insurance offering
- HSBC Life extends value-added benefits to more customers
- Candid rebrands as CLARK UK
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Launch Activity and Innovation
- Bluezone launches life insurance cover for people with type 2 diabetes
- Protection Guru enhances Protection Guru Pro
- Vitality tested a new direct-to-consumer solution
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Advertising and Marketing Activity
- Above-the-line advertising expenditure declines by 29%
- Figure 35: Total above-the-line, online display and direct mail advertising expenditure on life insurance and over-50s guaranteed acceptance plans, 2018/19-2022/23
- Neilson leads advertising expenditure
- Vitality increases adspend
- CLARK UK promotes its Tom brand with Tyson Fury
- Figure 36: Top 10 above-the-line, online display and direct mail advertising expenditure on life insurance (including term assurance), 2021/22-2022/23
- TV continues to dominate above-the-line adspend
- Figure 37: Total above-the-line, online display and direct mail advertising expenditure on life insurance (including term assurance), by media type, 2020/21-2022/23
- Nielsen Ad Intel coverage
- Above-the-line advertising expenditure declines by 29%
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Protection and Life Insurance Product Ownership
- A third of adults have life insurance
- Figure 38: Protection insurance product ownership, 2022-23
- Mortgage owners with children are a key target group for life insurance
- Figure 39: Protection Insurance product ownership, by parents and mortgage holders, 2023
- Term assurance is the most popular type of life insurance
- Figure 40: Type of life insurance product owned, 2023
- Most policyholders are unlikely to cancel their life insurance
- Figure 41: Likelihood that life insurance policyholders will cancel their cover due to the rising cost of living, 2023
- A third of adults have life insurance
-
Consideration of Life Insurance
- Consideration of life insurance is still higher than pre-pandemic
- Figure 42: Consideration of life insurance, 2019-23
- Consideration of life insurance is higher among younger age groups…
- Figure 43: Consideration of life insurance, by age groups, 2023
- …and those with low level of savings
- Figure 44: Consideration of life insurance, by value of cash savings, 2023
- Consideration of life insurance is still higher than pre-pandemic
-
Barriers to Life Insurance Cover Ownership
- A lack of affordability is the top reason for not having cover
- Figure 45: Barriers to life insurance, 2023
- Improve understanding to increase interest and uptake
- A lack of affordability is the top reason for not having cover
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Interest in Additional Benefits
- A third of adults find gift vouchers appealing when taking out life insurance
- Figure 46: Interest in additional benefits, 2023
- Additional medical services have a strong appeal
- Figure 47: Interest in additional benefits, by interest in additional benefits, 2023
- A combination of vouchers and additional medical services would reach more than half of consumers
- Figure 48: TURF Analysis – Term Assurance, May 2023
- A third of adults find gift vouchers appealing when taking out life insurance
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Behaviours towards Life Insurance
- The cost of living crisis has made life insurance less of a priority
- Figure 49: Behaviours towards life insurance, 2023
- Improve understanding of different types of life insurance
- Figure 50: Selected behaviour towards life insurance, by consideration of life insurance, 2023
- Generation X shows great interest in affordable cover
- Figure 51: Attitude towards life insurance – CHAID – Tree output, May 2023
- The cost of living crisis has made life insurance less of a priority
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
- Figure 52: Attitude towards life insurance – CHAID – Table output, May 2023
- TURF analysis methodology
- Figure 53: TURF Analysis – Term Assurance, May 2023
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Appendix – Forecast Methodology
- Market forecast and prediction intervals
- Figure 54: Market size and forecast for term assurance – new contracts, with prediction interval, 2018-28
- Figure 55: Market size and forecast for term assurance – new premiums, with prediction interval, 2018-28
- Market drivers and assumptions
- Forecast methodology
- Market forecast and prediction intervals
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