Swiss Re Life & Health reports record year for UK life and health sales
13 May 2003
London, 13 May 2003 – Swiss Re Life & Health has today published Term & Health Watch, its annual benchmark analysis of new life and health insurance sales to UK consumers. For 2002, the results show massive increases and set new records in sales of term assurance, critical illness and income protection:
- More than two million new term assurance policies sold in the UK - up 31% from 2001
- Over one million critical illness sales - an increase of 34%
- Almost 250,000 income protection policies - up 20%
Total new sales |
2002 |
2001 |
% change |
| Individual term assurance |
2,051,682
|
1,571,062
|
30.6
|
| Individual critical illness |
1,167,928
|
872,184
|
33.9
|
| Individual income protection |
245,063
|
204,379
|
19.9
|
High volume of sales are mortgage related
More than half of the new policies were mortgage related. According to Term & Health Watch, the mortgage market is a considerable source of sales of protection products. But the report also suggests that sales of life cover, critical illness and income protection depend too heavily on the UK housing market, warning that a downturn in the housing sector could have a negative impact on protection sales.
2002 |
2001 |
% change |
|
| Individual term assurance sales | |||
| Mortgage related |
1,057,418
|
774,376
|
36.6
|
| Non-mortgage related |
994,264
|
796,686
|
24.8
|
| Individual critical illness sales | |||
| Mortgage related |
572,234
|
502,741
|
13.8
|
| Non-mortgage related |
595,694
|
369,443
|
61.2
|
| Individual income protection sales | |||
| Expenditure/mortgage related |
124,737
|
84,000
|
48.5
|
| Non-expenditure/non-mortgage related |
120,326
|
120,379
|
0
|
IFA sales represent major proportion
Product sales via independent financial advisers make a significant contribution to the overall figure.
IFA sales |
2002 |
2001 |
% change |
| Individual term assurance |
904,946
|
653,498
|
38.5
|
| Individual critical illness |
571,382
|
402,100
|
42.1
|
| Individual income protection |
116,302
|
98,138
|
18.5
|
Consumers prefer face-to-face sales
The results show that most consumers prefer a face-to-face consultation with an intermediary when buying protection insurance. In 2002, approximately 90% of new protection policies via all distribution channels were sold face-to-face.
‘Protection Gaps’ remain to be filled
Despite these encouraging figures, the number of new policies sold falls short of the overall level of protection that, according to Swiss Re Life & Health, is necessary to ensure that UK consumers are adequately protected. Swiss Re estimates that there is a gap of some £2 trillion between the amount of term assurance that UK consumers currently hold and the amount they should have in place (Insurance Report - Whose risk is it anyway?, Swiss Re Life & Health Limited, November 2002 (£2 trillion = £2,000 billion)). In respect of income protection cover, the gap is some £130 billion in annual benefit (Press release: ‘Swiss Re warns of £130 billion shortfall in income protection insurance amongst UK consumers’, 11 March 2003).
Commenting on the results, Mark Johnson, Head of Sales and Marketing at Swiss Re Life & Health, said: “Our report confirms that we have a dynamic and competitive market for long-term protection business with new sales at record levels. Intermediaries are clearly responding positively to difficult investment conditions by addressing consumers’ most fundamental needs.
“But, there is still a long way to go to close the Protection Gaps that our research has identified,“ he warned.
Notes to editors
Media copies of Term & Health Watch, and photographs of the chapter authors, are available from the contacts provided at the front of this release.
Please note that the report is not available to the general public, and Swiss Re respectfully asks publications covering its launch not to indicate otherwise.
Swiss Re
Swiss Re is a leading reinsurer and the world’s largest life and health reinsurer. The company is global, operating from 70 offices in 30 countries. Since its foundation in 1863, Swiss Re has been in the reinsurance business. Swiss Re has three business groups: Property & Casualty, Life & Health and Financial Services. Swiss Re offers a wide range of traditional reinsurance products and related services, which are complemented by insurance-based corporate finance solutions and supplementary services. Swiss Re is rated “AA+” by Standard & Poor’s, “Aa1” by Moody’s and “A++” by A.M. Best.
Contact:
Tim Dickenson, tel + 44 (0)207204 3937
Lorraine Sage, tel + 44 (0)207 814 3184
