Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Term Assurance - UK - August 2010

This report undertakes a detailed analysis of the term assurance market. The size of the market is explored in both volume and value terms, as well as the expected growth over the next five years. The key players in the market are analysed, including an overview of how the market breaks down in terms of market share. The various distribution channels within the sector are explored before embarking on a consumer-focused analysis of the market, covering product ownership levels, potential purchase triggers and people’s attitudes towards life insurance.

  • According to Swiss Re, the life assurance protection gap increased for the first time since 2004 last year, rising to £2.4 trillion in 2009, from £2.3 trillion in 2008.
  • The decline in mortgage lending and the impact of the recession on consumer spending have had a detrimental impact on the term assurance market, although new policy sales held up relatively well in 2009, increasing by 2% in volume and 1% in value.
  • The dominance of the top five term assurance providers in the UK has declined over the last few years as the market becomes more competitive and diverse. This is demonstrated by the fact that the top five’s combined share of the market has fallen from 62% in 2007 to 55% in 2009 (Swiss Re).
  • Over the next five years, Mintel predicts that the total number of new term assurance policies sold will increase by 16%, with total new premiums also rising by 17%, as the conditions in the mortgage market gradually improve and consumer confidence/spending increases.
  • According to Mintel’s consumer research, a fifth of people feel they don’t need life insurance due to their own circumstances (ie no children/no mortgage), rising to 35% of people who don’t own a policy.
  • Looking at potential purchase triggers, over a quarter of adults say that if they were to consider taking out a life policy, buying a house would be their reason for doing so (twice as many as the second most popular reason – having a baby, 13%).

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Issues in the Market

      • Key issues
        • Definitions and report scope
          • Term assurance
            • Whole-of-life policies
              • Endowment policies
                • Investment or protection?
                  • Figure 1: The categorisation of life protection policies, 2010
                • Abbreviations
                • Future Opportunities

                  • Tackling the issue of consumer apathy
                    • Targeting the empowered woman
                    • Market in Brief

                      • New policy sales increased by 2% last year
                        • Figure 2: Volume and value of new individual regular-premium term assurance policy sales, 2002-10
                      • The life assurance gap widens
                        • Changing demographics could lead to product innovation
                          • Legal & General is the leading term assurance provider
                            • Figure 3: Top five providers of individual term assurance, by new policy sales, 2008 and 2009
                          • A heavily intermediated market
                            • Figure 4: Total new premiums (£m) for individual regular-premium term assurance policies written, by distribution channel, 2005-09
                          • Total sector adspend has fallen by 39% since 2007
                            • Half of all UK adults own life assurance
                              • Figure 5: Ownership of different types of life insurance, May 2010
                            • Buying a house is by far the main purchase trigger
                              • Figure 6: Triggers to considering taking out life insurance, May 2010
                            • Peace of mind is a big selling point for consumers
                            • Internal Market Environment

                              • Key points
                                • The protection gap continues to grow…
                                  • …and many blame a lack of engagement and education
                                    • Consumers often misjudge the cost of life insurance
                                      • Commission bias is an area of concern for consumers
                                        • Figure 7: Attitudes towards financial advice, February 2010
                                      • Life insurance complaints increased last year…
                                        • Figure 8: Financial services firms complained about, by sector, 2007/08-2009/10
                                      • …but the industry is working hard to improve standards
                                        • Advisers expanding their portfolios to include protection
                                          • Providers are looking at simplifying the application process
                                            • Looking at simplified gateway products
                                              • Regulation of pure protection products
                                                • No read-across of RDR proposals…
                                                  • …but there could be potential for a shift in adviser priorities
                                                    • The ABI raises the idea of compulsory protection
                                                    • Broader Market Environment

                                                      • Key points
                                                        • The decline in mortgage lending has affected the market
                                                          • Figure 9: Number of mortgage approvals for house purchase, by sector, January 2004-April 2010
                                                        • Affordability constraints – the private rented sector is taking over
                                                          • Figure 10: Household tenure in England, by number of households and proportion of total households, 1961-2008/09*
                                                        • Consumers have cut back spending during the recession…
                                                          • Figure 11: UK population aged 16+, PDI, consumer expenditure and savings (at constant 2005 prices), 2005-15
                                                        • …particularly on discretionary items like life insurance
                                                          • Figure 12: The percentage of total consumer expenditure spent on life insurance*, 1970-2009
                                                        • People are living longer, which means cheaper premiums
                                                          • Figure 13: Cohort expected age* of death at age 60, by gender, 1981-2058
                                                        • An ageing population may affect the product mix
                                                          • Figure 14: UK population, by age, 2004-29
                                                        • Rising affluence bodes well for policy sales
                                                          • Figure 15: Structure of the UK population, by socio-economic group, 2004-15
                                                      • SWOT Analysis

                                                          • Figure 16: Term assurance – SWOT analysis, 2010
                                                      • Who’s Innovating?

                                                        • Key points
                                                          • Aviva trials postcode pricing for protection
                                                            • Making life easier for customers and advisers
                                                              • L&G makes its policies more flexible
                                                                • …as does Zurich
                                                                • Market Size and Forecast

                                                                  • Key points
                                                                    • The term assurance market held up relatively well
                                                                      • Figure 17: Volume and value of new individual regular-premium term assurance policy sales, 2002-10
                                                                    • Sales of mortgage-related policies continue to decline
                                                                      • Figure 18: Volume and value of new individual regular-premium term assurance policy sales, by policy type, 2005-09
                                                                    • Providers continue to cut the cost of cover
                                                                      • Figure 19: Average annual premiums on new individual regular-premium term assurance policies written, by policy type, 2005-09
                                                                    • The cost of mortgage-related cover dips sharply
                                                                      • Existing book of business fell by 6% in 2008
                                                                        • Figure 20: Volume and value of all individual regular-premium term assurance policies in force at year end, 2001-08
                                                                      • Forecast
                                                                        • Steady growth predicted between 2010-15
                                                                          • Figure 21: Forecast for total volume and value of new individual regular premium term assurance policy sales, 2005-15
                                                                        • Factors used in the forecast
                                                                        • Market Share

                                                                          • Key points
                                                                            • Legal & General is the market leader for term assurance
                                                                              • Figure 22: Top five providers of individual term assurance, by new policy sales, 2008 and 2009
                                                                          • Companies and Products

                                                                            • Legal & General
                                                                                • Figure 23: Legal & General Group – financial performance, 2008 and 2009
                                                                              • Aviva (formerly Norwich Union)
                                                                                  • Figure 24: Aviva plc – financial performance, 2008 and 2009
                                                                                • AEGON (formerly AEGON Scottish Equitable)
                                                                                    • Figure 25: AEGON UK – financial performance, 2008 and 2009
                                                                                  • Friends Provident
                                                                                      • Figure 26: Friends Provident plc – financial performance, 2008 and 2009
                                                                                    • AXA
                                                                                        • Figure 27: AXA Group – financial performance, 2008 and 2009
                                                                                    • Brand Communication and Promotion

                                                                                      • Key points
                                                                                        • Total life insurance adspend has held up relatively well…
                                                                                          • Figure 28: Breakdown of top-level life protection* advertising expenditure, by sub-category, 2007-09
                                                                                        • ..but adspend has been driven by over-50s plans
                                                                                          • Aviva is the biggest advertiser in the term assurance market
                                                                                            • Figure 29: Life protection/term assurance* market advertising expenditure, by company (top ten, others summarised), 2007-09
                                                                                          • A sector with a very mixed approach to advertising
                                                                                            • Figure 30: Life protection/term assurance* market advertising expenditure, by media type, 2009
                                                                                        • Channels to Market

                                                                                          • Key points
                                                                                            • The term assurance market is heavily intermediated
                                                                                              • Figure 31: Total new premiums (£m) for individual regular-premium term assurance policies written, by distribution channel, 2005-09
                                                                                            • IFAs are more dominant in the non-mortgage-related sector
                                                                                              • Figure 32: Total new premiums for individual regular-premium term assurance policies written, by distribution channel and policy type, 2005-09
                                                                                          • Product Ownership Levels

                                                                                            • Key points
                                                                                              • A third of UK adults own term assurance…
                                                                                                  • Figure 33: Ownership of different types of life insurance, May 2010
                                                                                                • …with 3% of people thinking about taking out a policy
                                                                                                  • A product aimed at married couples and people with a mortgage…
                                                                                                    • Figure 34: Ownership of different types of life insurance, by demographics, May 2010
                                                                                                  • …although affluence and affordability are also relevant
                                                                                                    • Just 5% of people without cover are in the market for a policy
                                                                                                      • Figure 35: Cross-holdings of different types of life insurance (most popular types), May 2010
                                                                                                  • Purchase Triggers

                                                                                                    • Key points
                                                                                                      • Life insurance – a market that is linked to house purchase
                                                                                                          • Figure 36: Triggers to considering taking out life insurance, May 2010
                                                                                                        • Men are more likely to take out a policy after getting married…
                                                                                                          • Figure 37: Main triggers to considering taking out life insurance, by demographics, May 2010
                                                                                                        • …while ABs are more influenced by buying a house
                                                                                                          • Advisers are more influential in the investment-linked sector
                                                                                                            • Figure 38: Triggers to considering taking out life insurance, by ownership of the most popular types of life insurance, May 2010
                                                                                                          • The difference between expectations and experience
                                                                                                          • Attitudes towards Life Insurance

                                                                                                            • Key points
                                                                                                              • Many like the peace of mind that life insurance offers…
                                                                                                                  • Figure 39: Attitudes towards life insurance, May 2010
                                                                                                                • …but a fifth of people don’t feel they need cover
                                                                                                                  • Families and third agers are the key target market…
                                                                                                                    • Figure 40: Most popular attitudes towards life insurance, by demographics, May 2010
                                                                                                                  • …with high earners also more likely to value cover
                                                                                                                    • Women are more likely to seek professional advice
                                                                                                                      • Don’t rule out up-selling to existing policyholders
                                                                                                                        • Figure 41: Attitudes towards life insurance, by ownership of the most popular types of life insurance, May 2010
                                                                                                                    • Methods of Arrangement

                                                                                                                      • Key points
                                                                                                                        • Most people would want to arrange cover face to face…
                                                                                                                            • Figure 42: Channels used to arrange life insurance, May 2010
                                                                                                                          • …but there is real potential to increase online policy sales
                                                                                                                            • Figure 43: Channels used to arrange life insurance, by demographics, May 2010
                                                                                                                          • Four in ten policyholders would consider buying online
                                                                                                                            • Figure 44: Channels used to arrange life insurance, by ownership of the most popular types of life insurance, May 2010
                                                                                                                          • Aggregator users are more likely to distrust providers
                                                                                                                            • Figure 45: Attitudes towards life insurance, by channels used to arrange cover, May 2010
                                                                                                                        • Target Groups

                                                                                                                          • Key points
                                                                                                                            • The Unengaged Majority feel they don’t need life insurance…
                                                                                                                              • Figure 46: Attitudes towards life insurance, by target groups, May 2010
                                                                                                                            • …while Life Insurance Lovers are strong advocates of the product
                                                                                                                              • Life Insurance Lovers are most likely to have cover
                                                                                                                                • Figure 47: Ownership of different types of life insurance, by target groups, May 2010
                                                                                                                              • Having a baby is a key purchase trigger for Independent Arrangers
                                                                                                                                • Figure 48: Triggers to considering taking out life insurance, by target groups, May 2010
                                                                                                                              • Independent Arrangers are the best target for aggregators
                                                                                                                                • Figure 49: Channels used to arrange life insurance, by target groups, May 2010
                                                                                                                              • Popular tabloid readers are a good target
                                                                                                                                • Figure 50: Target groups, by demographics, May 2010
                                                                                                                            • Appendix – Channels to Market

                                                                                                                                • Figure 51: Total new premiums for individual regular-premium term assurance policies written, by distribution channel, 2005-09
                                                                                                                            • Appendix – Product Ownership Levels

                                                                                                                                • Figure 52: Ownership of different types of life insurance, by demographics, May 2010
                                                                                                                                • Figure 53: Ownership of different types of life insurance, by demographics, May 2010 (continued)
                                                                                                                            • Appendix – Purchase Triggers

                                                                                                                                • Figure 54: Triggers to considering taking out life insurance, by demographics, May 2010
                                                                                                                                • Figure 55: Triggers to considering taking out life insurance, by demographics, May 2010 (continued)
                                                                                                                            • Appendix – Attitudes towards Life Insurance

                                                                                                                                • Figure 56: Attitudes towards life insurance, by demographics, May 2010
                                                                                                                                • Figure 57: Attitudes towards life insurance, by demographics, May 2010 (continued)
                                                                                                                            • Appendix – Methods of Arrangement

                                                                                                                                • Figure 58: Channels used to arrange life insurance, by demographics, May 2010
                                                                                                                            • Appendix – Target Groups

                                                                                                                                • Figure 59: Target groups, by demographics, May 2010

                                                                                                                            Companies Covered

                                                                                                                            • Aegon UK
                                                                                                                            • Asda Group Ltd
                                                                                                                            • Association of British Insurers
                                                                                                                            • Aviva Plc
                                                                                                                            • AXA PPP healthcare
                                                                                                                            • AXA Sun Life
                                                                                                                            • Bank of England
                                                                                                                            • Bankhall Investment Associates Ltd
                                                                                                                            • Barclays Bank plc
                                                                                                                            • Burns Anderson Independent Network PLC
                                                                                                                            • Chelsea Building Society
                                                                                                                            • Co-operative Group
                                                                                                                            • Co-operative Insurance Society Ltd
                                                                                                                            • Competition Commission
                                                                                                                            • Destini Financial Services Group
                                                                                                                            • Direct Line Group Limited
                                                                                                                            • Dunfermline Building Society
                                                                                                                            • engage Mutual Assurance
                                                                                                                            • Financial Ombudsman Service
                                                                                                                            • Financial Services Authority (The)
                                                                                                                            • First Direct
                                                                                                                            • Friends Provident plc
                                                                                                                            • Government Actuary's Department (GAD)
                                                                                                                            • Homeowners Friendly Society
                                                                                                                            • HSBC Private Bank (UK) Limited
                                                                                                                            • Intrinsic Financial Services
                                                                                                                            • J. Sainsbury
                                                                                                                            • Kantar Media
                                                                                                                            • Legal & General Assurance Society Limited
                                                                                                                            • Legal & General Group PLC
                                                                                                                            • Lighthouse Group Plc
                                                                                                                            • Lloyds Banking Group
                                                                                                                            • Lloyds TSB Insurance
                                                                                                                            • Market & Opinion Research International (MORI)
                                                                                                                            • Marks & Spencer
                                                                                                                            • MORE TH>N
                                                                                                                            • Nationwide Building Society
                                                                                                                            • NatWest
                                                                                                                            • Openwork
                                                                                                                            • Origen
                                                                                                                            • Post Office Limited
                                                                                                                            • Principality Building Society
                                                                                                                            • Resolution plc
                                                                                                                            • Royal Albert Hall
                                                                                                                            • Royal Bank of Scotland Group plc
                                                                                                                            • RSA
                                                                                                                            • Sainsbury's Bank
                                                                                                                            • Scottish Equitable
                                                                                                                            • Scottish Widows Bank plc
                                                                                                                            • Simply Biz plc
                                                                                                                            • Skipton Building Society
                                                                                                                            • Skipton Financial Services
                                                                                                                            • Somerfield
                                                                                                                            • St James' Place Plc
                                                                                                                            • Swiss Re
                                                                                                                            • Tenet Group Ltd
                                                                                                                            • Tesco Personal Finance Limited
                                                                                                                            • Tesco Plc
                                                                                                                            • UBS Wealth Management UK Ltd
                                                                                                                            • Waitrose
                                                                                                                            • West Bromwich Building Society
                                                                                                                            • Winterthur Life UK Limited
                                                                                                                            • Wm Morrison Supermarkets
                                                                                                                            • Zurich Financial Services

                                                                                                                            Term Assurance - UK - August 2010

                                                                                                                            £1,995.00 (Excl.Tax)