Table of Contents
Introduction and Abbreviations
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- Scope of the report
- Context
- History
- Concepts
- Culture
- Uberrimae fidei
- The changing face of life insurance
- Types of life protection product
- Global information and research
- Special note on terminology
- Definitions
- Consumer research
- ACORN
- Abbreviations
Premier Insight
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- Figure 1: Life protection market drivers, September 2004
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Executive Summary
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- Background considerations
- Industry issues
- Market size
- The consumer
- Future developments
Market Drivers
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- Life-expectancy
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- Figure 2: Expectation of life at age 50 in the UK, by gender, 1971-2040
- Other demographic changes
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- Figure 3: Proportion of persons living alone, 25-44 age group (%), 1973-2002
- Scientific techniques
- Quantitative techniques
- Medical advances
- Regulation
- Changes in the pensions market
- Investment conditions
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- Figure 4: FTSE 100 and FTSE All Share indices, daily prices, January 1996-June 2004
- Impact of the property market
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- Figure 5: Real house prices (mix-adjusted), 1970-2003
- Adverse publicity
- Access to information technology
Market Size and Trends
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- Market participation
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- Figure 6: Reference model for participation in life protection market
- Market size
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- Figure 7: Schematic for market size
- Policies in force
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- Figure 8: Regular-premium life policies in force, 2001-03
- Special note on industrial branch business
- New business generation
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- Figure 9: Overall life business, by life industry classification, by annual new regular-premium income, 2003
- Pulling out of the dive?
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- Figure 10: New regular-premium individual life protection policies written, 1997-2004
- Figure 11: New regular-premium individual life protection premium income, 1997-2004
- Term business cooling off…
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- Figure 12: New sales of term assurance, by mortgage- and non-mortgage-related business, 1997-2004
- …but still growing relatively
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- Figure 13: Term assurance in the context of the regular-premium market, by volume and value, 1997-2004
- Whole-of-life bottomed out…
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- Figure 14: New whole-of-life business, by volume and value, 1997-2004
- …and may be showing relative strength
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- Figure 15: Whole-of-life insurance in the context of the regular-premium market, by volume and value, 1997-2004
- Endowment bloodbath…
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- Figure 16: Endowment insurance new business trends, 1997-2004
- …not quite as gory as it might be…
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- Figure 17: Whole-of-life insurance in the context of the regular-premium market, by volume and value, 1997-2004
- …and emergency surgery might yet save the day
Key Players and the Competitive Environment
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- Supplier ranking
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- Figure 18: Trends in new business written by leading writers of regular-premium life insurance, 1999-2003
- Profiles of leading life protection insurance providers
- Future developments
Product Development
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- Types of life protection product
- Term insurance
- Whole-of-life insurance
- Endowment insurance
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- Figure 19: Composition of typical life fund, mid-2002
- Traded endowments
- Future product development
- Reigniting the endowment business
- Cutting red tape
- Changing the culture
Distribution
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- Figure 20: Future market positioning of IFAs
- Independent financial advisers
- Direct sales and tied agents
- Direct marketing and telesales
- Solicitors and accountants
- Distribution by product type
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- Figure 21: Distribution of regular-premium life insurance premium income, by channel, 1997-2004
- Term assurance distribution
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- Figure 22: Distribution of term assurance premium income, by channel, 2000-03
- Whole-of-life distribution
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- Figure 23: Distribution of whole-of-life insurance premium income, by channel, 2000-03
- Endowment distribution
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- Figure 24: Distribution of savings and mortgage endowments, by channel, 2000-03
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Advertising and Promotion
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- Big players dominate
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- Figure 25: Annual advertising expenditure by major life insurers, £1 million+, August 2002/July 2003 and August 2003/July 2004
- Reliance on the written word
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- Figure 26: Investment in life insurers’ advertising expenditure, by media type, 2003/04
Consumer Financial Activity
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- Demand on the main financial services providers
- Borrowing, saving and debt repayment – activity diminishing
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- Figure 27: Savings, investment, borrowing and debt repayment, consumers’ expected activity, September 2002-June 2004
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- Figure 28: Expected financial activity, by gender, age, socio-economic group, household income and working status, June 2004 and average for the last ten quarters
- Investments and pension contributions look set to suffer
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- Figure 29: Leading financial activities planned in the next six months, December 2002-June 2004
- Mortgage market may now be turning
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- Figure 30: Intended mortgage and property purchase activity, September 2002-June 2004
- Halifax and NatWest were strong in the latest quarter
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- Figure 31: Main financial services providers, market shares, June 2003-June 2004
- Nationwide should see significant ISA business
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- Figure 32: Saving, investment and lending market sizes, by expected customer demand and brand leaders (overall % intending to undertake activity in brackets), June 2004
- 65% of The Royal Bank of Scotland customers intend to be financially active
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- Figure 33: Activity levels of main financial services providers’ customer bases, June 2004
- Implications for the life protection business
The Consumer
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- Household penetration
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- Figure 34: Household penetration of life protection products, 1990-2004
- Ownership of products
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- Figure 35: Life protection product ownership overall, by gender, August 2004
- Implications
- The young don’t expect to die
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- Figure 36: Life protection product ownership overall, by age, August 2004
- Implications
- A familiar pattern
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- Figure 37: Life protection product ownership overall, by socio-economic group and region, August 2004
- Implications
- Families in full-time work need it most
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- Figure 38: Life protection product ownership overall, by working status, marital status, presence of children, lifestage and Mintel’s Special Groups, August 2004
- Implications
- Popular with techies?
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- Figure 39: Life protection product ownership overall, by technology usage and ACORN categories, August 2004
- Implications
- Family responsibility crosses boundaries
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- Figure 40: Life protection product ownership overall, by media usage, commercial TV viewing and supermarkets used, August 2004
- Implications
- Distribution
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- Figure 41: Top six most popular distribution channels, by gender, August 2004
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- Figure 42: Next five most popular distribution channels, by gender, August 2004
- Implications
- Age agnostic
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- Figure 43: Top six most popular distribution channels, by age and socio-economic group, August 2004
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- Figure 44: Next five most popular distribution channels, by age and socio-economic group, August 2004
- Implications
- Traditional patterns in the regions
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- Figure 45: Top six most popular distribution channels, by region, August 2004
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- Figure 46: Next five most popular distribution channels, by region, August 2004
- Implications
- Work, marital status and presence of children
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- Figure 47: Top six most popular distribution channels, by working status, marital status and presence of children, August 2004
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- Figure 48: Next five most popular distribution channels, by working status, marital status and presence of children, August 2004
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- Figure 49: Top six most popular distribution channels, by lifestage and Mintel’s Special Groups, August 2004
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- Figure 50: Next five most popular distribution channels, by lifestage and Mintel’s Special Groups, August 2004
- Implications
- Netheads use the Net
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- Figure 51: Top six most popular distribution channels, by technology usage and ACORN categories, August 2004
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- Figure 52: Next five most popular distribution channels, by technology usage and ACORN categories, August 2004
- Implications
- Broadsheet readers have advisers, red top readers go to the bank
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- Figure 53: Top six most popular distribution channels, by media usage, commercial TV viewing and supermarkets used, August 2004
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- Figure 54: Next five most popular distribution channels, by media usage, commercial TV viewing and supermarkets used, August 2004
- Implications
Consumer Attitudes and Targeting Opportunities
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- Worries about dying
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- Figure 55: ‘If my partner or I were to die, I would worry that my family would face financial hardship in the future’, by gender, age and socio-economic group, August 2004
- Implications
- Pennine divide
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- Figure 56: ‘If my partner or I were to die, I would worry that my family would face financial hardship in the future’, by TV region, August 2004
- Implications
- Home is where the heart is
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- Figure 57: ’If my partner or I were to die, I would worry that my family would face financial hardship in the future’, by working status, marital status, presence of children, lifestage and Mintel’s Special Groups, August 2004
- Implications
- Shopping and media habits a good guide
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- Figure 58: ‘If my partner or I were to die, I would worry that my family would face financial hardship in the future’, by media usage, commercial TV viewing and supermarkets used, August 2004
- Implications
- Protection worth the price
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- Figure 59: ‘For the extra monthly cost, it’s worth getting life insurance on any loan or investment’, by gender, age and socio-economic group, August 2004
- Implications
- It’s the family that counts, every time
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- Figure 60: ‘For the extra monthly cost, it’s worth getting life insurance on any loan or investment’, by working status, marital status, presence of children, lifestage and Mintel’s Special Groups, August 2004
- Implications
- A reserve of cash
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- Figure 61: ‘If I really needed money, I would cash in my life insurance policy’, by gender, age and socio-economic group, August 2004
- Implications
- Pure investors most likely to cash in
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- Figure 62: ‘If I really needed money, I would cash in my life insurance policy’, by working status, marital status, presence of children, lifestage and Mintel’s Special Groups, August 2004
- Implications
- Driven by the mortgage
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- Figure 63: ‘Most of my life insurance products are attached to a mortgage’, by gender, age and socio-economic group, August 2004
- Implications
- Building a home and family drives life cover
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- Figure 64: ‘Most of my life insurance products are attached to a mortgage’, by working status, marital status, presence of children, lifestage and Mintel’s Special Groups, August 2004
- Implications
- Further analysis
- CHAID analysis
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- Figure 65: Statistical comparison of consumer groups for life protection, August 2004
- Repertoire
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- Figure 66: Repertoire analysis of life protection products, August 2004
- Consumer typology
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- Figure 67: Correlation of channel usage in life protection, August 2004
Industry Views
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- Effect of Regulation
- Trend in product marketing
- Future for endowments
- Distribution
- Other issues
The Future of Life Protection
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- Change management
- Whither the life protection market?
Forecast
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- Figure 68: Forecast of the UK life protection market, by value, 2004-09
- Term assurance helps to slow market decline
- Penetration of whole-of-life insurance is low
- Is it the end for endowments insurance?
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- Figure 69: Forecast of the UK life protection market, by volume, 2004-09
- Volume will show a better growth rate than sales value
- Factors incorporated
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- Figure 70: Variables used to forecast life protection market, by segment, September 2004
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