Table of Contents
Introduction and Abbreviations
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- Intense marketing activity and cheaper premiums drive up new CIC policy sales
- CIC sector issues
- CIC premiums
- Report contents
- Methodology
- Definitions
- Global information and research
- Consumer research
- ACORN
- Abbreviations
Premier Insights
Executive Summary
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- New sales of CIC neared 1.2 million in 2002
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- Figure 1: New sales of individual critical illness policies, 2000-03
- Norwich Union sold the most new individual CIC policies in 2002
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- Figure 2: New sales of critical illness cover, by provider, 2002
- IFA sales increase strongly
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- Figure 3: New individual CIC sales, by distribution channel, 1998-2002
- CIC claims rise
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- Figure 4: Critical illness claims, by cause, 2002
- Product design shifts towards revisable definitions
- Premiums are decreasing
- Life-expectancy continues to rise
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- Figure 5: Life-expectancy at birth and selected ages, by gender, 1971-2000
Market Factors and Background
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- New mortgage business enables greater CIC sales
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- Figure 6: New mortgage business, by volume and value, 1996-2003
- Term assurance sales are vigorous
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- Figure 7: Whole life and term, regular-premium life assurance sales, by volume and value, 1994-2002
- One in three people will be diagnosed with cancer
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- Figure 8: Incidence of cancer, by main type, 2000
- Some 35% of people diagnosed with cancer are aged under 65
- Cause of CIC claims
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- Figure 9: Critical illness claims by cause, 2002
- Major causes of mortality
- Government and media spotlight the health of the population
- Claims increase as a result of improved healthcare and increased life-expectancy
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- Figure 10: Life-expectancy, at birth and selected ages, by gender, 1971-2000
- Some 50% of mortgage-related term assurance is sold with CIC attached
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- Figure 11: Sales of mortgage-related term assurance with CIC, 1998-2002
- Growth in PDI could benefit CIC sales
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- Figure 12: Trends in PDI, consumer expenditure and the savings ratio, at 1997 constant prices, 1997-2007
- CIC claim issues made the news last year
- Is critical illness insurance heading in the right direction or are consumers disillusioned with the product?
- New EC regulations could see men charged more for cover
- ABI activity
Market Size
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- Nearly 1.2 million new individual CIC policies were sold in 2002
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- Figure 13: New sales of individual critical illness policies, 1992-2003
- Mintel estimates that new sales increased by 15% in 2003
- CIC sales have increased rapidly in the last few years
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- Figure 14: Illustration of new CIC policy sales, 1992-2003
- CIC saturation
- The majority of mortgage-linked policies sold are term acceleration
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- Figure 15: New sales of individual mortgage-related CIC policies, by type of policy, 1998-2002
- Sales of endowment acceleration policies plummet
- Free-standing sales lose momentum in 2002
- New non-mortgage-related CIC sales near 600,000
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- Figure 16: New sales of non-mortgage-related CIC policies, by type of policy, 1998-2002
- New rider benefit to life business increases for third year in a row
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- Figure 17: Total new premiums for CIC policies, by standalone policy and rider benefit to life business, 1999-2003
- Premiums for smokers are substantially higher compared to non-smokers
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- Figure 18: Indicative premium prices for critical illness term policies, by age and gender, smoker and non-smoker, March 2004
- Average sum assured continues to rise
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- Figure 19: Average sum assured for a new individual critical illness policy, 1992-2002
- Non-mortgage-related sales surpass mortgage-related sales
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- Figure 20: New sales of CIC policies, by mortgage-related and non-mortgage-related sales, 1998-2003
- Market share of critical illness cover sales
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- Figure 21: Illustration of market share of CIC policies, by mortgage-related and non-mortgage-related new sales, 1998-2003
- The group critical illness market
- Increasing CIC sales through legislation
- The general health insurance market and CIC
- How could sales of CIC be increased?
The Key Providers
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- Norwich Union provided the most new policies in 2002
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- Figure 22: New sales of critical illness cover, by provider, 2002
- Company snapshots and selected CIC plan reviews
- Norwich Union (Aviva plc)
- Norwich Union definitions
- Creating value-for-money policy features
- Legal & General
- Legal & General definitions
- Cross-selling CIC
- Scottish Provident (Abbey)
- Scottish Provident definitions
- HSBC
- Scottish Widows
- Scottish Widows definitions
- Standard Life product changes
- Updates for Friends Provident CIC policy
- Liverpool Victoria FS policy changes
- CIC policy changes at Scottish Equitable
Product Development and Design
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- Providers innovate to preserve their competitive edge
- Plan features continuously changing across the industry
- Eradicating the protection gap
- New life sales versus new CIC sales
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- Figure 23: Total new regular-premium individual life sales and new individual CIC sales, 1998-2002
- New CIC sales continue to outstrip new IP sales
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- Figure 24: New individual CIC sales and new individual income protection sales, 1998-2002
- Pulling out of fixed definitions
- Guaranteed rates versus renewable rates
- How can CIC adapt to succeed in the future?
- FSA regulations
Distribution
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- IFA new policy sales near 600,000
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- Figure 25: New individual CIC sales, by distribution channel, 2002
- Internet potential still remains largely untapped
- DSF and tied agent sales are decreasing
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- Figure 26: New individual CIC sales, by distribution channel, 1998-2002
The Consumer
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- A high number of people remain uneducated about health and protection insurance
- CIC ownership highest ever in 2004
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- Figure 27: Ownership of health/protection insurance, 2002 and 2004
- Ownership of CIC highest amongst people in the pre-/no family and family lifestages
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- Figure 28: Ownership of CIC, IP and IPMI, by gender, age, socio-economic group and lifestage, January 2004
- Critical illness cover ownership is higher among people who are married and people who work full-time
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- Figure 29: Ownership of CIC, IP and IPMI, by working status, marital status, TV region, Mintel’s Special Groups and ACORN categories, January 2004
- CIC owners are quite likely to be Internet users or broadsheet readers
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- Figure 30: Ownership of CIC, IP and IPMI, by new technology users, newspaper readership, supermarket usage and commercial TV viewing, January 2004
- More people now believe they are adequately protected
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- Figure 31: Responses to attitudinal statements on CIC and loss of earnings, 2002 and 2004
- Around 2.8 million people would be interested in purchasing CIC
- People in the family lifestage most likely to believe they adequately protected
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- Figure 32: Responses to attitudinal statements on CIC and loss of earnings, by gender, age, socio-economic group and lifestage, January 2004
- People in South West, Wales or South feel most adequately protected
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- Figure 33: Responses to attitudinal statements on CIC and loss of earnings, by working status, marital status, TV region, Mintel’s Special Groups and ACORN categories, January 2004
- Popular tabloid readers least likely to feel adequately protected
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- Figure 34: Responses to attitudinal statements on CIC and loss of earnings, by new technology users, newspaper readership, supermarket usage and commercial TV viewing, January 2004
- Two thirds of CIC owners agreed that they feel adequately protected
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- Figure 35: Responses to attitudinal statements on the need for CIC, by ownership of health and protection products, January 2004
Consumer Attitudes and Targeting Opportunities
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- Key Consumer Findings
- CIC still lags behind IP and MPPI
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- Figure 36: Necessity of health/protection products, 2002 and 2004
- A relatively high number of young people believe it is necessary to own protection products
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- Figure 37: Necessity of health/protection products, by gender, age and socio-economic group, January 2004
- Full-time working couples are fairly likely to believe that CIC is necessary to own
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- Figure 38: Necessity of health/protection products, by marital status, lifestage and Mintel’s Special Groups, January 2004
- 6 million people believe CIC is necessary to own
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- Figure 39: Necessity of health/protection products, by working status, TV region and ACORN categories, January 2004
- The Internet and broadsheet newspapers should be used to target potential health and protection product buyers
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- Figure 40: Necessity of health/protection products, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, January 2004
- A quarter of those with IP deem CIC as necessary
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- Figure 41: Necessity of health/protection products, by type of product owned, January 2004
- The perception is that health and protection products are too expensive
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- Figure 42: Attitudes towards health and protection products, 2002 and 2004
- People aged 35-64 are most likely to agree protection products are too expensive
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- Figure 43: Attitudes towards health and protection products, by gender, age, socio-economic group and lifestage, January 2004
- Part-time workers most likely to agree people should take greater responsibility
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- Figure 44: Attitudes towards health and protection products, by working status, marital status, TV region, Mintel’s Special Groups and ACORN categories, January 2004
- How to attract those who believe that protection is too expensive
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- Figure 45: Attitudes towards health and protection products, by new technology users, newspaper readership, supermarket usage and commercial TV viewing, January 2004
- A significant number of protection product owners believe products are too expensive
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- Figure 46: Agreement with attitudinal statements on health and protection products, by ownership of PMI, CIC and IP, January 2004
- Potential CIC buyers most adamant people should self-provide
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- Figure 47: Agreement with attitudinal statements, by necessity of products, January 2004
- Men aged 25+ are the main target group for health and protection products
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- Figure 48: Analysis of health and protection product main target groups using CHAID, January 2004
The Future
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- Guaranteed definition policies will become less popular
- Policy design will change
- Claims will rise due to the ageing population and detection
- Changing health of the population will affect claims in the long term
- Non-mortgage-related sales will be dominant
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- Figure 49: Forecast of the number of mortgage accounts, 2003-07
- Can the success story continue?
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- Figure 50: Sales of new individual life, CIC and IP policies, 2002
Forecast
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- Figure 51: Forecast of the critical illness cover market, in terms of new premiums and new sales, 2003-09
- The CIC market is still growing
- Difficulties for CIC providers
- Suggestions for the market
- Factors incorporated
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