Table of Contents
Issues in the Market
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- Mintel asks…
- Issues explored
- Market definitions
- Abbreviations
Future Opportunities
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- Some cover is better than no cover
- Customise this!
- Seeking security in uncertain times
- Holism and the complete protection solution
- Trust and transparency
Market in Brief
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- New business volumes continue to decline
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- Figure 1: Volume and value of new individual CI sales, 2003-08
- Mortgage-related sector hit by housing market slowdown
- Market outlook: it’ll get worse before it gets better
- Economic factors weigh heavily
- Most CI claims are for cancer or heart-related illness
- Recent industry developments
- New innovations cause some excitement
- Market leaders…
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- Figure 2: Market shares of the top five CI providers, based on volume sales, 2007
- …and market movers
- Intermediaries are responsible for the vast majority of CI sales
- CI market penetration remains steady
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- Figure 3: Ownership of CI cover and other related products, November 2008
- Policyholder experience
- Market barriers
- General attitudes towards protection insurance
Broader Market Environment
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- Key points
- Economic downturn: implications for the protection insurance industry
- Property slump hits CI sales
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- Figure 4: Number of UK residential property transactions with a value of £40,000 upwards – seasonally adjusted, 2005-08 (quartlerly)
- Volume of new mortgage sales halved in 2008
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- Figure 5: Number of loans for house purchase, by type of borrower, 2000-08
- Implications for the CI market
- Falling house prices are likely to lead to lower sums assured
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- Figure 6: Average sum assured for all new individual CI policies, 2000-08
Social Trends and Lifestyle Factors
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- Key points
- Living longer but not necessarily healthy lives
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- Figure 7: Cohort life-expectancy at age 30, by gender, 1981-2056
- Implications for CI providers
- Core conditions covered by CI
- Lifestyle factors
- Pricing for risk
- The top killer conditions
- Cancer risk increases with age
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- Figure 8: Age-specific incidence of all cancers, by gender – UK, 2003
- Implications
- Skin cancer on the rise
- Smoking continues to lose appeal…
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- Figure 9: Prevalence of cigarette smoking among GB adults aged 16+, by gender, 1974-2006
- Implications
- …but obesity is on the rise…
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- Figure 10: Number of obese men and women – England, 2003 and 2010
- Implications
- …and a significant minority of adults regularly exceed recommended alcohol limits
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- Figure 11: GB adults exceeding specified levels of alcohol*, by gender and age, 2005
- Implications
Internal Market Environment
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- Key points
- Recent regulatory milestones
- Industry-led initiatives
- Answering the critics with a new approach to claims
- Rising cost of claims
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- Figure 12: Total CI claims paid and proportion of successful claims, by top five providers, 2006 and 2007
- Fall in proportion of declined claims due to non-disclosure
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- Figure 13: Proportion of CI claims declined due to non-disclosure, by top five providers, 2006 and 2007
- Implication and opportunity
- Cancer is top reason for a CI claim
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- Figure 14: CI claims segmented by cause and supplementary data, by top five providers, 2007 (unless specified)
Competitive Context
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- Key points
- Related products
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- Figure 15: Number of individual protection policies in force, by type, 2003-07
- CI versus IP
- Combined solutions
- Disease-specific cover
- The life assurance and income protection gaps
Strengths and Weaknesses in the Market
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- Combating criticism to rebuild confidence in the product
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- Figure 16: Critical illness insurance market – strengths, weaknesses, opportunities and threats, 2009
Who’s Innovating?
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- Key points
- Improvements made to the application process and claims handling
- Changes to increase product flexibility
- The numbers game
- The ‘all-in-one’ plan from Fortis and LifeSearch
Trade Perspective
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- About the respondents
- Cost is a factor behind the fall in demand for CI
- Big improvements made to claims handling and tele-underwriting
- Extending cover and exploring untapped markets
- Tough times ahead, but providers remain optimistic
- Striking the right balance
Market Size and Forecast
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- Key points
- Data sources
- Negative perceptions drive down demand for CI
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- Figure 17: Volume of new individual CI sales, by source, 2003-07
- Slump in housing market further undermines demand for CI
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- Figure 18: New individual CI sales, by volume and value, 2003-08
- Mintel expects the market to begin a recovery from 2011
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- Figure 19: Forecast of new individual CI sales, by volume and value, 2008-13
- Implication and opportunity
- Factors incorporated
Segment Performance
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- Key points
- Most CI is sold with other insurance
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- Figure 20: New individual CI sales, by type, by volume and value, 2003-08
- Non-mortgage-linked business rebounded in 2008
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- Figure 21: New individual CI rider benefit sales, by volume and value and type of insurance, 2003-08
- Mortgage-related CI sees share of sales slip to 50%
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- Figure 22: Mortgage-related CI sales as a proportion of total new individual CI sales, 2003-08
- Group CI – a small market in comparison
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- Figure 23: Volume and value of new group CI sales, 2003-07
Market Share
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- Key points
- Legal & General is still number one
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- Figure 24: Top five product providers, by volume of new individual CI sales, 2005-07
- Legal & General strengthens its leader position
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- Figure 25: Illustration of top five product providers’ market shares, 2005-07
- Who’s in and who’s out?
- AIG topped the ABI life rankings in 2007…
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- Figure 26: UK life business rankings, by gross premiums, 2006 and 2007
- Credit crisis impact
- …and Unum moves into first position in the protection business sector
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- Figure 27: UK protection business rankings, by gross premiums, 2006 and 2007
Companies and Products
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- Legal & General
- Resolution, Scottish Provident and Royal London
- Norwich Union
- Friends Provident
- Scottish Widows
Brand Communication and Promotion
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- Key points
- Limited advertising activity
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- Figure 28: Total advertising expenditure on life protection products, by sector, 2006-08
- Norwich Union is the top advertiser of life protection products
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- Figure 29: Top ten advertisers of life assurance products, 2006-08
- Direct mail accounts for the largest proportion of adspend
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- Figure 30: Segmentation of adspend on life assurance products, by media type, 2007/08
Channels to Market
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- Key points
- IFAs increase their share of the CI rider market…
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- Figure 31: Distribution of new individual CI rider benefit premiums, by channel, 2005-08
- …and remain the dominant channel in the standalone CI sector
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- Figure 32: Distribution of new individual standalone CI premiums, by channel, 2005-08
- Implications and opportunity: IFAs working with providers
The Consumer – Product Penetration
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- Key points
- About Mintel’s consumer survey
- The presence of a mortgage and children ups the attraction of having CI
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- Figure 33: Ownership of CI cover and other related products, by all adults, mortgage holders and family lifestage group, November 2008
- Some confusion over ownership protection products
- Stable CI take-up
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- Figure 34: Ownership of MPPI, CI cover and IP, 2004-08
- More than a fifth of ABs have CI
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- Figure 35: Ownership of CI cover and other related products, by gender and socio-economic group, November 2008
- Implications
- CI ownership is highest among the 35-44 age band
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- Figure 36: Ownership of CI cover and other related products, by age, November 2008
- Penetration peaks around age 40, then rapidly falls
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- Figure 37: Illustration of product penetration, by age, November 2008
- Implication and opportunity
- Higher earners aged 25-44 represent the main target audience for CI
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- Figure 38: Target groups identified for the CI and protection insurance market, November 2008
- Product crossover
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- Figure 39: Ownership of CI cover and other related products – cross-analysis, November 2008
- One in 12 adults are ‘Fully Protected’
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- Figure 40: Ownership of protection product combinations, by demographic sub-group, November 2008
- Implication and opportunity
The Consumer – Experience of Arranging Cover
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- Key points
- Low response rates suggest a fair amount of customer apathy
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- Figure 41: Experiences of arranged CI cover, by gender, November 2008
- The over-45s more likely to have a standalone policy than the under-45s
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- Figure 42: Experiences of arranged CI cover, by age and socio-economic group, November 2008
The Consumer – Take-up Barriers
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- Key points
- Combating CAT
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- Figure 43: Top ten reasons for not having CI cover, November 2008
- Implication and opportunity
- Good scope to target more ABC1s
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- Figure 44: Reasons for not having CI cover, by gender and socio-economic group, November 2008
- Invest in the young, invest in the future
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- Figure 45: Reasons for not having CI cover, by age, November 2008
The Consumer – Attitudes Towards Protection Insurance
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- Key points
- Families want protection at the right price
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- Figure 46: Agreement with statements about CI and related insurance, by all adults, mortgage holders and family lifestage group, November 2008
- A hierarchy of cover
- Scaling benefits
- Packaged solutions
- Having CI gives people ‘peace of mind’
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- Figure 47: Agreement with statements about CI and related insurance, by type of insurance held, November 2008
- ABs are keenest on protection insurance…
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- Figure 48: Agreement with statements about CI and related insurance, by gender and socio-economic group, November 2008
- …as are those aged 35-54
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- Figure 49: Agreement with statements about CI and related insurance, by age, November 2008
- Further analysis
Appendix 1: Segmental Analysis of Product Ownership
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- Figure 50: Product ownership, by demographic sub-group – part 1, November 2008
- Figure 51: Product ownership, by demographic sub-group – part 2, November 2008
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Appendix 2: Product Profile
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- Figure 52: Profile of CI policyholders versus total sample, by demographic sub-group – part 1, November 2008
- Figure 53: Profile of CI policyholders versus total sample, by demographic sub-group – part 2, November 2008
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