2022
9
UK Critical Illness Cover Market Report 2022
2022-02-24T03:10:09+00:00
OX1100781
2195
148236
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Report
en_GB
"The critical illness cover market bounced back well in 2021 after a challenging 2020. Company activity has focused on product development in line with consumer demand and interests, as well…

UK Critical Illness Cover Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Critical Illness Cover report identifies consumer attitudes towards critical illness cover, NHS waiting times, competitive strategies, and other protection insurance products in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Critical Illness Cover market in the UK.

Current Market Landscape

Mintel research highlights an opportunity for growth within the critical illness insurance market. Nearly a quarter of consumers are somewhat or very likely to consider critical illness cover in the future. In order to realise this growth potential, providers and advisers need to focus on widening both engagement in and understanding of critical illness cover.

  • 27% of consumers do not understand the difference between critical illness cover and income protection.
  • 50% of consumers with life insurance would not be very or at all likely to consider critical illness cover in the future.
  • 20% of consumers with household incomes greater than £50,000 per year have critical illness cover, compared to just 7% of those with household incomes under £15,500.

Inflationary pressures will have a mixed impact on this market. On the one hand, a squeeze on household income and budgets will make people more cautious about taking on additional, longer-term expenditure. However, inflation could also encourage the uptake of critical illness cover as households are forced to consider their financial vulnerability, especially at a time when many consumers are unable to save as much as they could previously.

Future Market Trends in Critical Illness Cover 

NHS delays pose a significant threat to the stability of the critical illness cover market. Insurers expect to face an influx of claims in the near future, as access to NHS diagnostic services improves and those on lengthy waiting lists seek medical attention for health concerns. A rise in claims will push up subsequent premiums, putting further pressure on the affordability of the product and placing it out of reach for many.

Innovation in the market to provide more engaging products and benefits to consumers is a growing opportunity for protection insurers. Different levels of cover at different price points will open up this product to more consumers, which will be increasingly important if premiums increase and household budgets are under pressure. Providing additional benefits to consumers, such as rewards programmes or remote GP access, will also better demonstrate value to consumers and tap into heightened concerns about health and healthcare.

Read on to discover more details or take a look at all of our UK Financial market research.

Quickly understand

  • The size of the critical illness cover market and a five-year forecast for new business.
  • Key drivers for the critical illness cover market, including COVID-19 recovery, NHS wait times and inflation.
  • Competitive strategies, launch activity and innovation in the market.
  • Uptake and consideration of critical illness cover among UK consumers.
  • Attitudes towards critical illness cover and other protection insurance products.

Covered in this report

Brands: Legal & General, Aviva, Royal London, Zurich, Vitality.

Expert analysis from a specialist in the field

This report, written by Natasha Hayes, a leading analyst in the Financial sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The critical illness cover market bounced back well in 2021 after a challenging 2020. Company activity has focused on product development in line with consumer demand and interests, as well as incorporating industry standards. Consumer research highlights that there is still progress to be made to demonstrate the value of cover to consumers, and scope to improve awareness and understanding of the policy.

Natasha Hayes
Financial Services Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for critical illness cover
      • Figure 1: Category outlook, 2022-26
    • The market
    • Market size and forecast
      • Figure 2: Market size for critical illness cover market – value of new premiums, 2016-26
      • Figure 3: Market size for critical illness cover – volume of new premiums, 2016-26
    • Term rider policies continue to dominate
      • Figure 4: New critical illness cover contracts, by market segment, 2017-21
    • A continued decline in non-advised sales
      • Figure 5: Total new contracts, by advice channel, 2017-21
    • The impact of COVID-19 on claims is uncertain
    • Companies and brands
    • Legal & General remained the market leader in 2020
    • Providers offer customers COVID-19 support
    • Mental health standards introduced by the ABI
    • New products launched in the past year
    • The consumer
    • 12% have critical illness cover
      • Figure 6: Protection insurance product ownership, 2021
    • 27% of those without critical illness cover would consider it in the future
      • Figure 7: Likelihood of consumers to consider critical illness cover in the future, 2021
    • Offering a range in channels remains crucial to widening reach of critical illness
      • Figure 8: Channels to critical illness cover, 2021
    • There is a trade-off between price and policy coverage
      • Figure 9: Product features important when taking out a critical illness policy, 2021
    • Healthcare incentives are more likely to sway consumers
      • Figure 10: Incentives to purchase critical illness cover, 2021
    • Scope for a more basic type of policy
      • Figure 11: Most important health conditions to be included in critical illness cover, 2021
    • Signs of overconfidence in assessment of financial security
      • Figure 12: Consumer confidence in managing finances if main earner were to fall ill, 2021
    • Understanding of the market could be improved
      • Figure 13: Attitudes towards critical illness and protection insurance, 2021
  3. Issues and Insights

    • COVID-19 has led to interest in critical illness cover…
    • …but the rising cost of living will increase emphasis on product value
    • Consumers need help to engage in the market
    • NHS waiting times raise concerns
  4. Market Size and Performance

    • The market shows strong signs of recovery
      • Figure 14: Market size for critical illness cover sector – new premiums, 2016-21
    • New contracts up by almost 40,000 in 2021
      • Figure 15: Number of new contracts for critical illness cover, 2016-21
  5. Market Forecast

    • Growth forecast in critical illness sales for next five years
      • Figure 16: Category outlook, 2022-26
    • Market forecast: value
      • Figure 17: Market forecast for critical illness cover, value of new premiums, 2016-26
    • Market forecast: volume
      • Figure 18: Market forecast for critical illness cover, volume of new premiums, 2016-26
    • Market drivers and assumptions
      • Figure 19: Key drivers affecting Mintel’s market forecast, 2015-26
    • Forecast methodology
  6. Market Segmentation

    • Term rider policies continue to dominate market…
      • Figure 20: New critical illness cover contracts, by market segment, 2017-21
    • …but standalone policy sales are increasing
    • Home buyers continue to drive sales of critical illness
  7. Channels to Market

    • A continued decline in non-advised sales
      • Figure 21: Total new contracts, by advice channel, 2017-21
    • Independently advised sales are at five-year high…
    • …which could help promote stronger consumer understanding of the product
    • Advice plays a key role in mortgage-related policies
      • Figure 22: Mortgage term assurance with critical illness cover sales, by advice channel, 2021
  8. Claims Experience

    • The impact of COVID-19 is uncertain
      • Figure 23: Claims data for critical illness cover, 2016-20
    • Critical illness claims are dominated by cancer
      • Figure 24: Critical illness cover claims, by condition, 2020
    • COVID-related claims were low for critical illness cover
  9. Market Drivers

    • Millions are waiting for NHS treatment
      • Figure 25: Total number of people waiting for NHS services in England, 2019-21
    • Employment has held up better than expected
    • Inflationary pressures are mounting
    • Most consumers are worried about rising prices
      • Figure 26: Consumer concerns about household finances, 2021
    • The market faces regulatory intervention by the FCA
    • Property transactions recover from slump in 2020
      • Figure 27: UK residential property transactions over £40,000, 2017-2021
  10. Market Share

    • Royal London sales up by more than 20% in 2020
      • Figure 28: Volume sales and market shares of the top five providers of new individual critical illness cover, 2019 and 2020
    • Vitality highlights the value of its extensive condition coverage through claims stats
    • Aviva saw the greatest drop in sales in 2020
  11. Competitive Strategies

    • COVID-19 response
    • Providers have clarified customers’ cover for coronavirus on policies
    • Flexibility continues to be offered in times of financial hardship
    • Providers hone in on consumer concerns about access to healthcare
    • Zurich simplifies and enhances offering
    • Mental health support is an area of focus for the industry
    • Aviva extends partnership for mortgage term channel
  12. Launch Activity and Innovation

    • Zurich launches a new standalone critical illness cover product
    • LV= launches more affordable critical illness cover
    • L&G launches hybrid protection product
    • Aviva has invested in new digital services…
    • …along with Royal London
  13. Protection Product Ownership

    • One in eight have critical illness cover
      • Figure 29: Protection insurance product ownership, 2021
    • Consumers prioritise other protection products over critical illness cover
      • Figure 30: Protection product ownership, by household income, 2021
    • Critical illness cover is more popular for those with mortgages
    • More consumers are aware if they have a death-in-service benefit
      • Figure 31: Consumers with death-in-service benefit cover, 2019-21
    • Over 50% of consumers don’t have any type of protection cover
  14. Consideration of Critical Illness Cover

    • Over a quarter would consider critical illness cover in the future
      • Figure 32: Likelihood of consumers to consider critical illness cover in the future, 2019-21
      • Figure 33: Likelihood of life insurance owners to take out critical illness cover, 2021
    • Affluent parents more likely to consider critical illness cover
      • Figure 34: Critical Illness Cover – CHAID – Tree output, 2021
  15. Accessing Critical Illness Cover

    • Two in three have a preference for online channels…
      • Figure 35: Channels to critical illness cover, 2021
    • …but demand for traditional channels remains
  16. Important Factors when Choosing Critical Illness Cover

    • Price is a key factor
      • Figure 36: Product features considered important when taking out a critical illness policy, 2021
    • Older consumers are more concerned about the range of conditions covered
    • Healthcare incentives are more likely to sway consumers
      • Figure 37: Incentives to purchase critical illness cover, 2021
    • Gift cards provide short-term but tangible benefits
  17. Interest in Conditions Covered

    • Scope for a more basic type of policy
    • Most consumers regard cancer cover as essential
      • Figure 38: Most important health conditions to be included in critical illness cover, 2021
    • Dementia is a growing concern
  18. Attitudes towards Critical Illness Cover and Protection Insurance

    • Signs of overconfidence in assessment of financial security
      • Figure 39: Consumer confidence in managing finances if main earner were to fall ill, by household income, 2021
    • Consumers have a general lack of understanding of the market…
      • Figure 40: Attitudes towards critical illness and protection insurance, 2021
    • …and lack trust in providers
    • Growing health concerns provide opportunities for providers
  19. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
    • CHAID analysis methodology
      • Figure 41: Critical Illness Cover – CHAID – Table output, 2021
  20. Appendix – Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 42: Forecast value for new critical illness premiums, including lower and upper bounds, 2021-26
      • Figure 43: Forecast volume for new critical illness premiums, including lower and upper bounds , 2021-26
    • Market drivers and assumptions
    • Forecast methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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