Individual life and health insurance sales fall for the first time in seven years

Swiss Re's latest Term & Health Watch Report, produced in conjunction with iPipeline and out today, shows that new individual life and health insurance sales fell by 1.2% in 2020, the first drop since 2013.

While it is always disappointing to see a drop, the results are generally satisfactory given the difficulties presented by COVID-19.

Income protection was the hardest hit

Income protection was hardest hit, sales falling by 9.5%. Purchases by males fell by 12.4%, consistent with a drop in new policies providing benefits for just one or two years which are typically sold to manual occupations.

Term up, critical illness down

Individual new term assurance sales (life cover only) increased by 2.4% and new individual term policies with attaching critical illness benefits fell by 8.9% Overall, new critical illness sales dropped by 3.3%, with stand-alone cover up by 31.3%.

Guaranteed acceptance whole life policies

Sales of guaranteed acceptance whole life policies fell by 4.2%

Taking advice?

49.9% of all new level term assurance policies were arranged without advice, a 2.5% increase since 2019. The percentages for level and decreasing term policies were:

• Level term assurances 49.9%
• Level term and CI 23.9%
• Decreasing term assurance 24.2%
• Decreasing term and CI 10.3%

Policy ownership

The number of new Level Term Assurance policies written in trust increased from 11% to 14% and the number of new Level Term with CI policies from 12% to 16%. 11.3% of Level Term policies and 9.5% of Level Term with CI policies are on a joint life basis. Of the remaining 75%, some will be written as Life of Another or use beneficiary nomination within the policy as offered by Guardian and Royal London.

Online purchasing, or independent of an adviser, is likely to grow as remote buying becomes ever more a way of life. Whichever route the buyer chooses to use, it is incumbent on the industry as a whole to become more professional and take greater care to ensure that the proceeds are designated for the intended beneficiary.

If there was any doubt to consider this, there should be none, with the FCA now consulting on a Duty of Care to deliver good outcomes in retail consumer markets. It's probably a smart business move too as a more professional approach surely improves the quality and persistency of business written?

Ideas welcome on how we can accelerate the slow but steady progress we are seeing.