2020
9
UK Over-50s Guaranteed Acceptance Life Insurance Market Report 2020
2021-09-02T04:05:16+01:00
OX989428
2195
142066
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Report
en_GB
“COVID-19 has ended two years of healthy growth in the over-50s life insurance market; however, the market should recover quickly. A sharp drop-off in new business subsided in the second…

UK Over-50s Guaranteed Acceptance Life Insurance Market Report 2020

£ 2,195 (Excl.Tax)

Description

The UK Attitudes Towards Funeral Planning market research report identifies funeral planning industry analysis, funeral costs, and life insurance providers in the UK. The UK Attitudes Towards Funeral Planning Market report covers the market size, market forecast, market segmentation and industry trends for the Funeral Planning market in the UK. 

Current Market Landscape 

The government’s raft of social-distancing measures introduced in March 2020 saw funerals subjected to heavy restrictions to minimise transmission, with caps on attendees persisting into 2021. This saw funeral planning becoming much smaller scale and reduced the average spend, limiting the growth in the sector despite the surging death rates.

  • 47% of all adults agree that the pandemic has made simpler funerals more appealing.
  • While death figures in 2020 were 14% higher than the preceding 10-year average, spending on funeral services rose by just 6%.
  • Direct cremations accounted for an estimated 14% of all funerals in 2020, up from just 3% the year before.

2020 also saw a downturn in sales of new pre-paid funeral plans, both thanks to people’s changing priorities and negative perception of the sector. However, there was also a rise in aftercare services and memorial services held at a later date.

Future Market Trends in Funeral Planning 

As social-distancing measures lessen, funerals will undoubtedly become a bigger event once again. However, the lower costs associated with new consumer preferences for more paired-back events will put further pressure on operators. Savings built up during the pandemic could also mean that people are less inclined to take out pre-paid plans or over-50’s life insurance products.

UK funeral planning and funeral service providers must now be more innovative with their basic plans, as well as giving these lower-cost solutions a greater focus in their marketing communication. This could include showcasing their direct funeral options, but brands can also build plans that sit between these most basic funerals and their current propositions.

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

Quickly understand

  • The impact of COVID-19 on consumers and their engagement with smart home technology.
  • Who are the key demographics for smart home products and where marketers should focus efforts for sales growth.
  • What factors shoppers look for in smart home purchases and what themes resonate best with smart home participants.
  • Attitudes toward smart home technology and how consumers perceive the category.

Covered in this report

Services: Over-50’s life insurance, funerals, pre-paid funerals, cremations, burials, natural burial, human composting, water cremation, coffins.

Brands: Co-op, Dignity, Farewell, Environmental Stewardship Group, Loop, Pure Cremation.

Expert analysis from a specialist in the field

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

COVID-19 has ended two years of healthy growth in the over-50s life insurance market; however, the market should recover quickly. A sharp drop-off in new business subsided in the second half of 2020, and Mintel research suggests that the pandemic is motivating people to think more about their life insurance options. Although economic conditions will remain challenging in the near-to-mid-term, the simplicity and low cost nature of the product will continue to appeal. Longer-term growth will be fuelled by the ageing population and innovation to improve flexibility in areas such as premium payments and protected payouts.
George Zaborowski
Senior 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

    • Impact of COVID-19 on over-50s life insurance market
      • Figure 1: Short, medium and long-term impact of COVID-19 on over-50s life insurance, December 2020
    • The market
    • A period of impressive growth comes to an end in 2020…
    • …but the market is expected to bounce back quickly
      • Figure 2: Forecast of new over-50s guaranteed acceptance life insurance premiums, 2015-25 (prepared on 2 December 2020)
      • Figure 3: Forecast of new over-50s guaranteed acceptance life insurance volume sales, 2015-25 (prepared on 2 December 2020)
    • Most new over-50s policies arranged without advice
    • The target market for over-50s life insurance policies is growing
    • Companies and brands
    • SunLife the unrivalled market leader
      • Figure 4: Top five product providers, by number of new guaranteed acceptance whole-of-life providers’ sales, 2019
    • COVID-19 outbreak leads marketers to slash adspend
    • The consumer
    • 14% of over-50s have over-50s life insurance cover
      • Figure 5: Life insurance product ownership, September 2020
    • Target market more open to prepaid funeral plans than over-50s cover
      • Figure 6: Over-50s life insurance products that over-50s would consider arranging, September 2020
    • Covering funeral costs is the top reason for buying over-50s cover
      • Figure 7: Main reason for having arranged or considering arranging an over-50s life insurance policy, September 2020
    • Most over-50s plan owners confident about their policy coverage
      • Figure 8: Agreement with statements about the purchase and ownership of over-50s life ownership, September 2020
    • Independent sources of product information are viewed as most trustworthy
      • Figure 9: Most trusted sources of over-50s life insurance product information, September 2020
    • Product flexibility is valued by the target market
      • Figure 10: Most important features and benefits of an over-50s life insurance policy, September 2020
    • COVID-19 has prompted one in five over-50s to think about life insurance options
      • Figure 11: Agreement with statements about life insurance and personal finance, September 2020
  3. Issues and Insights

    • COVID-19 could lead to a rethink in over-50s life insurance advertising
    • Enhancing flexibility is key to attracting new customers
  4. The Market – Key Takeaways

    • A period of impressive growth comes to a halt in 2020…
    • …but the market is expected to bounce back swiftly
    • Target market for over-50s life insurance policies continues to grow
    • Older age groups are more tech-savvy than ever before
    • FCA issues guidance on helping policyholders facing financial difficulty
    • Prepaid funeral plans set to fall under the remit of the FCA
  5. Market Size and Forecast

    • Ageing population and innovation will drive market forward post-crisis
      • Figure 12: Short, medium and long-term impact of COVID-19 on over-50s life insurance, December 2020
    • COVID-19 puts an end to two years of strong growth
      • Figure 13: Value and volume of new over-50s guaranteed acceptance life insurance premiums, 2015-20 (prepared on 30 November 2020)
    • Market expected to return to growth in 2021
      • Figure 14: Forecast of new over-50s guaranteed acceptance life insurance premiums, 2015-25 (prepared on 2 December 2020)
      • Figure 15: Forecast of new over-50s guaranteed acceptance life insurance premiums, 2020-25 (prepared on 2 December 2020)
      • Figure 16: Forecast of new over-50s guaranteed acceptance life insurance volume sales, 2015-25 (prepared on 2 December 2020)
      • Figure 17: Forecast of new over-50s guaranteed acceptance life insurance volume sales, 2020-25 (prepared on 2 December 2020)
    • Market drivers and assumptions
      • Figure 18: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 2 December 2020)
    • Learnings from the last recession
      • Figure 19: Value and volume of new over-50s guaranteed acceptance life insurance premiums, 2007-15
    • Forecast methodology
  6. Channels to Market

    • Most over-50s policies are sold without advice
      • Figure 20: Percentage of new over-50s guaranteed acceptance life insurance premiums, by volume, by sales channel, 2015-19
  7. Market Drivers

    • By 2023 almost one in two UK adults will be 50 or older
      • Figure 21: UK population projections, by age, 2018-28
    • Life expectancy at age 50 increased in 2019
      • Figure 22: Change in life expectancy at age 50, by gender, 1998/2000-2017/19
    • Property ownership among older adults in decline
      • Figure 23: Housing tenure of 55-64 year olds, 2006/07-2018/19
    • Working lives are being prolonged
      • Figure 24: Employment rate among UK over-50s, by age, 2000-Q2 2020
    • The gap in internet use among older generations has narrowed
      • Figure 25: Online behaviour, by age, September 2020
  8. Regulatory and Legislative Changes

    • FCA issues guidance about assisting those facing financial difficulty
    • Prepaid funeral plan market to be regulated by the FCA
    • CMA funerals market investigation demands greater transparency
  9. Companies and Brands – Key Takeaways

    • SunLife remains the unrivalled market leader
    • Pandemic pushes providers to focus on flexible payment terms
    • Healthcare-related benefit could signal a new approach
    • COVID-19 outbreak leads marketers to slash adspend
  10. Market Share

    • SunLife remains the unequivocal market leader
    • Promis Life enters the top five
      • Figure 26: Top five product providers, by number of new guaranteed acceptance whole-of-life providers’ sales, 2019
  11. Competitive Strategies

    • COVID-19 response
    • SunLife
    • Royal London
    • AIG
    • British Seniors
    • Legal & General
    • Promis Life
    • Strategic Partnership Activity
    • AIG now focused exclusively on underwriting policies via partnerships
    • Santander and Aviva renew life insurance distribution partnership
    • Royal London expands partnership with Cover Direct
    • Increased availability of over-50s plans on comparison services
    • Online protection comparison platform, Choozi, adds over-50s plans
    • Cavendish Online launches over-50s life insurance comparison service
    • Providers continue to include new policy benefits and features
    • Legal & General adds Nurse Support Services to Sainsbury’s Bank-branded cover
    • OneFamily makes £300 of Funeral Funding a standard feature of its cover
    • Welcome gifts remain a popular customer acquisition strategy
  12. Advertising and Marketing Activity

    • Over-50s life insurance adspend falls by 12% in 2019/20
      • Figure 27: Total above-the-line, online display and direct mail advertising expenditure on over-50s life cover, 2015/16-2019/20
    • Adspend plummets in Q2 2020 due to COVID-19
      • Figure 28: Total above-the-line, online display and direct mail advertising expenditure on over-50s life cover, quarterly change on previous year, Q1 2017-Q2 2020
    • SunLife and Royal London account for most industry adspend
      • Figure 29: 10 biggest spenders on above-the-line, online display and direct mail advertising expenditure on over-50s life cover, year to 31 July 2020
    • TV and direct mail account for most spend
      • Figure 30: Total above-the-line, online display and direct mail advertising expenditure on over-50s life cover, by media type, 2015/16-2019/20
    • SunLife spreads its budget across the range of media types
      • Figure 31: Total above-the-line, online display and direct mail advertising expenditure on over-50s life cover, by media type and leading advertiser, year to 31 July 2020
    • Nielsen Ad Intel coverage
  13. The Consumer – Key Takeaways

    • Consumers are more open to prepaid funeral plans than over-50s cover
    • Most policyholders are confident about their policy coverage
    • Consumers trust independent sources of product information
    • Product flexibility valued by the target market
    • COVID-19 has prompted one in five to think more about life insurance
  14. Impact of COVID-19 on Consumer Behaviour

    • Concern about exposure to coronavirus rises as second wave hits
      • Figure 32: Level of concern about risk of exposure to COVID-19, February-November 2020
    • Over half of over-55s are worried about being exposed
      • Figure 33: Level of concern about risk of exposure to COVID-19, by age, 2-11 November 2020
    • Consumers’ sense of financial wellbeing still holding up
      • Figure 34: The Financial Wellbeing Index, January 2015-October 2020
    • Household finances stabilised by government aid and reduced spending
    • Increased focus on finances could benefit over-50s plan providers…
    • …however, many are feeling worse off than they did prior to COVID-19
      • Figure 35: Changes in household finances, January 2015-October 2020
  15. Life Insurance Ownership

    • Note about consumer research
    • Two in five over-50s have some form of life insurance
      • Figure 36: Life insurance product ownership, September 2020
    • Over-50s life cover ownership highest among over-75s
      • Figure 37: Life insurance product ownership, by age and gender, September 2020
    • Nearly a quarter of over-75s have a prepaid funeral plan
    • A third of renters own over-50s cover or prepaid funeral plans
      • Figure 38: Life insurance product ownership, by housing tenure, September 2020
  16. Consideration of Over-50s Life Insurance

    • Prepaid funeral plans more likely to be considered than over-50s cover
      • Figure 39: Over-50s life insurance products that over-50s would consider arranging, September 2020
    • Openness to taking out cover is highest among under-65s
      • Figure 40: Over-50s life insurance products that over-50s would consider arranging, by age, September 2020
    • Renters and mortgage holders the most likely to consider a policy
      • Figure 41: Over-50s life insurance products that over-50s would consider arranging, by housing tenure, September 2020
  17. Main Reason for Arranging an Over-50s Life Insurance Policy

    • Covering funeral costs is the main motivation for taking out an over-50s policy
      • Figure 42: Main reason for having arranged or considering arranging an over-50s life insurance policy, September 2020
    • Managing expectations to improve perceptions of industry
  18. Over-50s Life Insurance Purchase and Ownership Behaviour

    • Most over-50s plan owners are confident they have the right level of cover
      • Figure 43: Agreement with statements about the purchase and ownership of over-50s life ownership, September 2020
    • Prior relationship more important deciding factor than a welcome gift
  19. Most Trusted Sources of Product Information and Advertising

    • Consumers trust independent sources of information the most
      • Figure 44: Most trusted sources of over-50s life insurance product information, September 2020
    • Nearly half interested in over-50s cover trust consumer websites
      • Figure 45: Most trusted sources of over-50s life insurance product information, by those who would consider an over-50s life insurance policy or prepaid funeral plan, September 2020
    • Consumer websites are the most trusted regardless of age
      • Figure 46: Top five most trusted sources of over-50s life insurance product information, by age, September 2020
  20. Most Important Features of Over-50s Life Insurance

    • Consumers desire flexibility around payouts and premium payments
      • Figure 47: Most important features and benefits of an over-50s life insurance policy, September 2020
    • Flexibility a priority for those who would consider buying a policy
      • Figure 48: Most important features and benefits of an over-50s life insurance policy, by life insurance product ownership, September 2020
    • A fifth of existing over-50s policyholders say welcome gifts are important
    • The youngest of the target market show most interest in flexibility
      • Figure 49: Most important features and benefits of an over-50s life insurance policy, by age, September 2020
  21. Attitudes towards Life Insurance and Personal Finances

    • One in five say COVID-19 has prompted them to consider life cover
      • Figure 50: Agreement with statements about life insurance and personal finance, September 2020
    • Half of under-65s are worried about having enough money for retirement
      • Figure 51: Agreement with statements about life insurance and personal finance, by gender and age, September 2020
    • Most find it difficult to relate to ads aimed at over-50s
  22. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research 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

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*databooks not available with UK B2B Industry reports.

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