Bridging The Protection Gaps A Simple Solution Rw Protect 260912

Bridging the Protection Gaps - a simple solution?Ron Wheatcroft, Protect 26 September 2012

Ron Wheatcroft | Protect 26 September 2012

The Protection Gaps - ten years on

Market performance - individual business

Market performance – group risk business

The future?

Consumer expectations

2

Agenda


The Protection Gaps –ten years on

3

Ron Wheatcroft | Protect 26 September 2012 4

The Protection Gaps – ten years on


Individual protection business

5


Total new individual term policy sales – split by stand alone term and term with CI rider, 2007 - 2011

1,0

59

,82

7

98

5,1

44

1,0

31

,62

5

1,0

37

,44

6

96

4,2

25

48

2,1

03

46

2,7

51

47

6,0

60

50

3,3

52

52

3,8

81

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2007 2008 2009 2010 2011Stand alone term Term with ACCI Year


Total new individual whole life policy sales, unit-linked, non-linked and guaranteed acceptance plans, 2007 - 2011

219,362

282,438

318,078

371,467

400,682

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2007 2008 2009 2010 2011

YearWL sales


Total new individual income protection policy sales, 2007 – 2011

111,780

126,815

117,288

110,743 110,472

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2007 2008 2009 2010 2011IP sales Year


2011 sales figures flat with the exception of new whole life sales (largely guaranteed acceptance)

Individual term sales impacted by sluggish mortgage market

Retail IP - a lost cause?

9

The individual protection market


Group risk business

10


Group risk in force premium income (premiums rounded to the nearest £1,000)

Product 2007 2008 2009 2010 2011

Group life 910,775,162 945,210,629 897,285,619 918,635,231 956,074,087

Group CI 37,230,015 45,403,103 48,393,386 50,252,281 55,005,102

Group IP 640,931,111 648,902,366 567,971,284 517,385,394 517,995,843


Has consistently provided around 40% of all insured death benefits in the UK

Now provides 75% of all insured income protection benefits (has risen from 70% in 2002)

In addition, a number of employers choose to retain some or all of the cover promised to their workforce

Group CI is a small, but growing, market – is this the simplicity of the message?

Around 10% of all premiums are now flex or voluntary

12

The group risk market


RDR good for protection sales?

Gender-neutral pricing - buy now while stocks last – but what next?

I-E

Mortgage Market Review

The Dilnot Review into social care funding

Auto-enrolment - impact on employers and employees

The EU agenda – IMD2, extending the gender ban to age and disability?

Financial exclusion - simple products? How to turn on consumers

13

The future


Consumer expectations

14


47%

55%

63%

63%

80%

12%

16%

4%

12%

2%

32%

21%

22%

16%

10%

9%

9%

11%

9%

8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Income in retirement

Income after redundancy

Rehabilitation and convalescence

Income during long-term illness

Nursing care for the very old

Government Employer Individual Don't know

Whose responsibility is it today?


Whose responsibility in 10 years’ time?

23%

27%

27%

31%

35%

6%

8%

3%

7%

2%

55%

47%

52%

44%

45%

16%

17%

19%

17%

18%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Income in retirement

Income after redundancy

Rehabilitation and convalescence

Income during long-term illness

Nursing care for the very old

Government Employer Individual Don't know


Which insurance products or benefits do you have?

0%

10%

20%

30%

40%

50%

60%

Life insurance Critical illness Death-in-service

benefit

Income protection Mortgage-payment

protection

Full pay from

employer if

ill/ disabled

None of the above

2009 2011


What’s your main reason for not buying life insurance, critical illness cover or income protection?

-10%

0%

10%

20%

30%

40%

50%

60%

Can't afford it Don't need it Haven't thought about it

Haven't got around to it yet

Don't trust insurance companies

Difficult to calculate how

much cover you need

Have enough insurance

already

My employer pays for it

Life insurance Critical illness Income protection


Assuming you need life insurance cover of £100,000 how much would you be willing to pay for this a month?

0%

10%

20%

30%

40%

50%

60%

£0 - £5 £6 - £10 £11 - £15 £16 - £20 £21 - £25 £26 - £50 £51+ Don't know


"Insurance needs to be honest, clear and jargon free."

"Providers need to be seen to be working with you, providing a product where both of you would get some value."

"If anyone’s telling you anything, you’ve got to understand the benefits of having it."

Bridging the Protection Gaps - a simple solution?Ron Wheatcroft, Protect 26 September 2012

Thank you

Documents

Bridging The Protection Gaps A Simple Solution Rw Protect 260912