Table of Contents
Issues in the Market
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- Key issues
- Product background
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- Figure 1: Comparative summary of the two main sectors of the whole-of-life insurance market
- Tax benefits
- Market definitions
- Abbreviations
Future Opportunities
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- Trend: No Resting Place
- Trend: My Life, My Legacy
Market in Brief
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- The size of the market
- Market outlook
- Regulatory developments
- Competitive environment
- Leading brands
- Product development
- Distribution trends
- Advertising activity
- The key findings of Mintel’s consumer research
- Buying motivation and influencing factors
- Making arrangements for the future
Internal Market Environment
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- Key points
- Benefits paid on life policies continue to exceed total net premium income
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- Figure 2: Total UK life insurance business – benefits paid and total net premium income, 2000-09
- IHT changes reduce the appeal of investment-linked whole-of-life plans
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- Figure 3: Value of IHT transfers on death, 2003/04-2009/10
- Lack of adviser support hinders take-up
- Regulation round-up
- RDR update
- What impact will the RDR have on the consumer?
Broader Market Environment
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- Key points
- Macroeconomic factors
- Steady recovery but conditions remain tough for consumers
- What impact will this have on the whole-of-life insurance sector?
- Demographic and social trends
- An expanding target market
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- Figure 4: Trends in the UK total population, by age, 1970-2030
- Increasing longevity has exerted downward pressure on premiums
- Assumptions are made based on mortality statistics
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- Figure 6: Number of deaths in England and Wales, by age and gender, 2009
- Health and social activities of the over-50s
- Less than a quarter of over-50s have a health problem or disability
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- Figure 7: Presence of long-term illness, health problems or disability – over-50s, by age group, 2010
- Half of all over-50s eat a very healthy diet
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- Figure 8: Agreement with statements relating to diet and health – over-50s, by age group, 2010
- Most adults aged 50-74 are fairly active
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- Figure 9: Frequency of exercise – over-50s, by age group, 2010
- Two thirds of those aged 50-64 have broadband access
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- Figure 10: Internet and broadband penetration – over-50s, by age group, 2010
- The funeral market
- Rising funeral costs
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- Figure 11: Average cost of a funeral (including disbursements) in the UK, at current prices – UK, 2004-10
- Downside of using savings to pay for a funeral
- Social Fund shortfall
Competitive Context
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- Key points
- Different life products serve different target markets
- Term life insurance
- Whole-of-life insurance
- Demand for term assurance stabilises, while whole-of-life grows strongly
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- Figure 12: Volume and value of new regular-premium life insurance business, by type of policy, 2005-09
- Competition from funeral plans
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- Figure 13: Number of funeral plan sales and number in force, UK, 2005-09
- Leading funeral plan providers
SWOT Analysis – Guaranteed Acceptance Plans
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- Figure 14: Guaranteed acceptance plan market – strengths, weaknesses, opportunities and threats, 2010
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Who’s Innovating?
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- Key points
- Guaranteed acceptance plans are evolving and converging
- Recent developments in the guaranteed acceptance plan market
- Rewarding healthy lifestyles
- Targeting ex-pats
Trade Perspective
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- About the participating companies
- The RDR effect
- New distribution opportunities
- Product evolution
- Lack of awareness and understanding is not a problem in practice
- The future’s bright
Market Size and Forecast
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- Key points
- New business
- Sales growth continues, albeit solely driven by the non-linked sector
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- Figure 15: Volume and value of new individual regular-premium whole-of-life insurance policies, 2001-10
- A market of two halves
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- Figure 16: New regular-premium whole-of-life business, by product type, 2006-10
- Average non-linked premiums depressed by rising price competition
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- Figure 17: Average annual premiums for new whole-of-life policies, by product type, 2006-10
- Business in force
- There are nearly ten million whole-of-life policies in force…
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- Figure 18: Number of individual whole-of-life insurance policies in force, 2002-09
- …including two million non-profit regular-premium policies
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- Figure 19: Volume and value of regular-premium whole-of-life policies in force, by product type, 2005-09
- Forecast of new business
- The market will continue to grow strongly…
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- Figure 20: Forecast of total market volume – fan chart, 2006-15
- Figure 21: Forecast of total market value – fan chart, 2006-15
- …driven by the non-linked sector
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- Figure 22: Forecast of new regular-premium individual whole-of-life business, by volume and value, 2006-15
- Fan chart explanation
- Forecast methodology
Market Share
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- Key points
- Top five provider rankings
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- Figure 23: Top five individual product providers, by number of new individual whole-of-life sales, 2007-09
- Sun Life Direct continues to dominate the market
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- Figure 24: Top five providers of individual whole-of-life insurance, based on new sales volumes, 2009
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- Figure 25: Leading providers of guaranteed acceptance whole-of-life plans, 2010
Companies and Products
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- Sun Life Direct
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- Figure 26: Key financial indicators for AXA Sun Life Plc, 2008 and 2009
- Figure 27: Key financial indicators for AXA’s life business segment, 2008 and 2009
- Aviva
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- Figure 28: Key financial indicators for Aviva plc, 2008 and 2009 and H1 2009 and H1 2010
- Figure 29: Key financial indicators for Aviva’s Life segment, 2008 and 2009 and H1 2009 and H1 2010
- Scottish Widows
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- Figure 30: Key financial indicators for Scottish Widows Plc, 2008 and 2009
- LV=
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- Figure 31: Key financial indicators for LV= Group, 2008 and 2009
- Figure 32: Key financial indicators for LV=’s life and health protection segment, 2008 and 2009
- Engage Mutual
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- Figure 33: Key financial indicators for Engage Mutual Assurance, 2008 and 2009
- Legal & General
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- Figure 34: Key financial indicators for Legal & General Group, 2008 and 2009 and H1 2009 AND H1 2010
Brand Communication and Promotion
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- Key points
- Adspend on over-50s plans rose modestly in the 12 months to June 2010
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- Figure 35: Total advertising expenditure on life protection products, by product category, 2006-10
- Sun Life Direct invests heavily in advertising to defend its number one position
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- Figure 36: Top 15 advertisers of over-50s life insurance products, 2008-10
- Over-50s plan providers rely on direct marketing to generate sales and awareness
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- Figure 37: Proportional distribution of adspend on over-50s life insurance products, by media type, 2008-10
Channels to Market
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- Key points
- IFAs are responsible for generating the lion’s share of linked whole-of-life business
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- Figure 38: New linked whole-of-life premiums, by channel, 2006-09
- New bancassurance arrangements have helped boost sales of over-50s plans
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- Figure 39: New guaranteed acceptance plan and other non-linked whole-of-life premiums, by channel, 2006-09
- Figure 40: Proportional distribution of new whole-of-life premiums, by channel – linked versus non-linked, 2007-09
- Direct channels account for around three fifths of new guaranteed acceptance business
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- Figure 41: Proportional distribution of guaranteed acceptance plans, by channel, 2010
The Over-50s Consumer – Life Insurance Ownership
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- Key points
- Survey background
- More than half of over-50s have no life cover
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- Figure 42: Ownership of life insurance and funeral plans, by age group, August 2010
- Life insurance coverage declines sharply past state retirement age
- One in three insured over-50s do not know what type of cover they have
- Product overlap or consumer confusion?
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- Figure 43: Ownership of life insurance and funeral plans – cross-analysis, August 2010
- Identifying the core target groups
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- Figure 44: Target groups identified for the life insurance market, August 2010
- The typical whole-of-life policyholder
The Over-50s Consumer – Buying Motivation
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- Key points
- Life insurance is an emotive purchase
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- Figure 45: Main reasons for buying life insurance, by type of insurance owned, August 2010
- Multiple reasons for buying life cover
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- Figure 46: Main reasons for taking a life insurance policy, by main reasons for taking a life insurance policy, August 2010
The Over-50s Consumer – Influencing Factors
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- Key points
- A trusted and familiar brand is a major selling point for life insurers
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- Figure 47: Top ten factors influencing choice of life policy/provider, August 2010
- Guaranteed acceptance plan holders are also keen on straightforward products with affordable monthly premiums
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- Figure 48: Factors influencing choice of life policy/provider, by type of policy owned, August 2010
- Product choice is also influenced by the motivation to purchase
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- Figure 49: Factors that influenced choice of particular policy or provider, by main reasons for taking a life insurance policy, August 2010
The Consumer – Targeting Opportunities
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- Key points
- Death: the last taboo
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- Figure 50: Agreement with statements about financial planning and protection, by age group, August 2010
- More women than men have made a will
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- Figure 51: Agreement with statements about financial planning and protection, by gender and socio-economic group, August 2010
- Single people are least likely to have made a will or funeral plans
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- Figure 52: Agreement with statements about financial planning and protection, by marital status, August 2010
- Two fifths of over-50s with household incomes of £40K+ are interested in IHT mitigation
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- Figure 53: Agreement with statements about financial planning and protection, by gross annual household income, August 2010
- A significant minority of insured over-50s have no will in place
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- Figure 54: Agreement with statements about financial planning and protection, by type of policy owned, August 2010
- Further analysis
Appendix – Life Insurance Ownership
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- Figure 55: Ownership of life insurance and funeral plans, by demographics, August 2010
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Appendix – Profile of Policyholders
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- Figure 56: Demographic profile of life insurance ownership groups, August 2010
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