2022
9
UK Term Assurance Market Report 2022
2022-09-03T04:04:47+01:00
OX1101817
2995
155394
[{"name":"Insurance","url":"https:\/\/store.mintel.com\/industries\/finance\/financial-services\/insurance"}]
Report
en_GB
“After a strong performance in the term assurance market in 2021, future consideration of cover remains higher than before the pandemic. However, the cost of living crisis will have a…

UK Term Assurance Market Report 2022

$ 2,995 (Excl.Tax)

Description

The UK Term Assurance Market Report 2022 identifies consumers’ attitudes towards term assurance policies, the willingness of consumers to subscribe to term assurance, and the impact of inflation and the Ukraine conflict on life insurance in the UK. This report covers the UK term assurance market size, market forecast, market segmentation and industry trends for the UK life insurance market.

Life Insurance in the UK: Current Market Landscape

Our UK life insurance market statistics show that performance of term life insurance UK was strong in 2021, however, cost of living pressures now dampen the number of new term assurance subscribers. While interest in cover remains high, for many consumers, term assurance is not an immediate priority. A slowdown in the property market impacts mortgage-term sales and continued economic uncertainty means there is reluctance to take out cover over the next year.

According to our UK term insurance report, more adults without life insurance are likely to consider taking out a policy in the future compared to before the pandemic. Heightened interest in life insurance in the UK shows how the pandemic has induced a growing awareness of death and financial resilience among consumers.

UK Life Insurance Market Statistics: Market Share and Key Industry Trends

Our UK term insurance report has identified inflationary pressure and cost of living challenges as a major impact on the UK term assurance market. Consumers maintain interest in taking out cover but are likely to put off buying a policy for the time being, while existing policyholders are very unlikely to cancel cover and will look to other areas of their spending to cut back on.

Experts expect a slow recovery of the UK term assurance market starting in 2023 once pressure on household finances starts to ease and longer-term financial resilience moves up the agenda. Term life insurance UK will be an important consideration for consumers concerned about protecting their future financial position. Direct-to-consumer offerings will facilitate a broader range of channels to market, helping adults take out affordable cover.

  • 29% of adults without life insurance are likely to consider taking out a policy in the future compared to before the pandemic.
  • 76% think that the conflict in the Ukraine will have an impact on their household finances.
  • 37% of adults have a life insurance policy.
  • 63% of adults who own their home with a mortgage also have a life insurance policy.

UK Term Assurance Market Outlook: UK Life Insurance Market Trends

UK life insurance market statistics show that interest in the UK term assurance market continues to grow, especially amongst younger consumers looking for affordable cover. Consumer access will benefit from the development of different channels to the UK life insurance market.

Despite the challenges faced by the UK life insurance market, there are opportunities to differentiate offerings to specific underserved consumer groups, such as under-35-year-olds. Reaching these groups will require more development of direct channels and affordable cover options, as well as offering value-added elements and additional points of engagement such as reward schemes.

Read on to discover more details or take a look at all of our UK Life Insurance Market Research.

Quickly Understand

  • Market size and forecast for the UK term assurance market.
  • Market segmentation, channels to market and claims experience.
  • Competitive strategies, launch activity and advertising expenditure in the UK life insurance market.
  • Consumer ownership and interest in term assurance.
  • Features that would encourage consumers to consider term assurance.
  • Attitudes towards life insurance, and confidence in understanding the product.
  • Attitudes towards data sharing in life insurance and the incentives to encourage sharing.

Covered in this Report

Products: Mortgage term assurance, other-term assurance, decreasing term assurance, level-term assurance policies.

Brands: Aviva, Legal & General, Vitality, Beagle Street, Royal London.

Expert Analysis from a Specialist in the Field

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

After a strong performance in the term assurance market in 2021, future consideration of cover remains higher than before the pandemic. However, the cost of living crisis will have a negative impact on new demand for term assurance policies in 2022. Consumers are reluctant to take out new long-term policy commitments while the economic outlook is so uncertain. To generate serious demand, insurers need to demonstrate additional value of cover and offer basic, lower-cost options.

Natasha Hayes
Natasha Hayes
Financial Services Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for term assurance
      • Figure 1: Category outlook, 2022-27
    • The market
    • Market size and forecast
      • Figure 2: Market size and forecast for term assurance new premiums, 2017-27
      • Figure 3: Market size and forecast term assurance new contracts, 2017-27
    • Mortgage term sales affected by falling property transactions
      • Figure 4: Volume and value of new individual term assurance policy sales – mortgage-related sales, 2014-22
    • Other-term policies fare better
      • Figure 5: Volume and value of new individual term assurance policy sales – other-term sales, 2014-22
    • Non-advised sales continue to fall across mortgage and other-term policies
      • Figure 6: Number of mortgage and other-term assurance policies sold without advice, 2016-21
    • Companies and brands
    • Legal & General maintains market share top spot
      • Figure 7: Top five providers, measured by new term assurance sales, with and without critical illness, 2020-21
    • Insurtechs secure new funding
    • Measures introduced to support vulnerable customers
    • Partnerships dominate competitive strategies of leading providers
    • Legal & General brings hybrid protection-health product to the market
    • Bluezone to launch diabetes-specific life insurance
    • The consumer
    • Opportunity for growth in life insurance ownership among private renters
      • Figure 8: Protection insurance product ownership, 2021-22
    • Mortgage-linked products are most popular
      • Figure 9: Type of life insurance product owned, 2022
    • Consideration of life insurance remains higher than before the pandemic
      • Figure 10: Consideration of life insurance, 2019-21
    • D2C offerings will extend reach of engagement
    • There’s an opportunity for hybrid protection-health proposition
      • Figure 11: Policy features to encourage life insurance uptake, by under-35s living at home, 2022
    • Rewards programmes are likely to incentivise a younger demographic
    • Consumers are mainly interested in comparison sites for research
      • Figure 12: Attitudes towards life insurance among consumers engaged in the market, 2022
    • Opportunity to grow life insurance ownership among single-parent families
      • Figure 13: Attitudes towards life insurance, 2022
    • Majority of consumers are willing to share data with life insurers
      • Figure 14: Incentives to share personal and financial data with life insurance provider/adviser, 2022
  3. Issues and Insights

    • Cost of living pressures heighten existing challenges for the market
    • Mortgage term cover holders are unlikely to change or cancel cover
    • Other groups with life insurance may deem it less essential
    • Consumers may put off taking out cover
    • Rewards incentives will help draw younger consumers to the market
    • There are opportunities to target underserved consumers
  4. Market Size and Performance

    • Term assurance sales will suffer in 2022
      • Figure 15: Market size for term assurance, 2017-22
    • Cost of living pressures drive down average premium
      • Figure 16: Average premium for new term assurance contracts (across mortgage-term and other-term), 2015-22
  5. Market Forecast

    • Sales should rebound after a challenging 2022
      • Figure 17: Category outlook, 2022-27
    • New premiums will recover after a challenging 2022
      • Figure 18: Market forecast for term assurance new premiums, 2017-27
      • Figure 19: Market forecast for term assurance new premiums, 2017-27
    • New contracts expected to increase steadily over next five years
      • Figure 20: Market forecast term assurance new contracts, 2017-27
      • Figure 21: Market forecast term assurance new contracts, 2017-27
    • Learnings from the last income squeeze
      • Figure 22: New individual term assurance sales and average annual premiums, 2008-14
    • Forecast methodology
  6. Market Segmentation

    • Falling property transactions affect mortgage term sales
      • Figure 23: Volume and value of new individual term assurance policy sales – mortgage-related sales, 2014-22
    • Sales for other-term policies expected to fare better…
      • Figure 24: Volume and value of new individual term assurance policy sales – other-term sales, 2014-22
    • Average premium is expected to fall across the market
      • Figure 25: Average premium for new individual term assurance policy sales, by policy type, 2015-22
    • Cross-selling opportunities remain
      • Figure 26: Cross-sell rate for term assurance and critical illness cover, 2017-21
  7. Channels to Market

    • Non-advised sales continue to fall across mortgage- and other-term policies
      • Figure 27: Number of mortgage and other-term assurance policies sold without advice, 2016-21
    • Independent advice sales for mortgage-term policies have grown 27% in last five years
      • Figure 28: Number of new contracts for mortgage-related term assurance, 2017-21
    • Two in three buy other-term assurance policies with independent advice
      • Figure 29: Number of new contracts for other-term assurance, 2017-21
    • Bancassurance sales fail to recover to pre-pandemic levels
      • Figure 30: Proportion of new term assurance premiums sold through bancassurance, 2016-21
  8. Claims Experience

    • Number of claims paid rises 10% in 2021
      • Figure 31: Claims paid for term assurance policies, 2015-21
    • Insurer-published claims stats highlight high value of payouts
  9. Market Drivers and Legislative Update

    • Inflation and uncertainty grip the UK economy…
    • …driving a reduction in consumer financial wellbeing
      • Figure 32: Financial wellbeing index – UK, 2016-22
    • The term assurance market is tied to the mortgage market
    • Mortgage lending grew by 26% in 2021
      • Figure 33: Number of property transactions completed in the UK with value of £40,000 or above, 2015-22
    • Rate increases will dampen mortgage activity
      • Figure 34: Interest rates for selected types of mortgages, 2015-22
    • Bank of England scraps affordability ‘stress test’
    • 19% of households are privately renting
      • Figure 35: English housing stock, by tenure (proportions), 2016/17-2020/21
    • New Consumer Duty rules announced
  10. Market Share

    • Legal & General maintains market share in 2021
      • Figure 36: Top five providers, measured by new term assurance sales, with and without critical illness, 2020-21
    • Aviva rises up the ranking table
    • Royal London’s sales fall in 2021
    • AIG plans to rebrand its Life & Retirement business
    • Beagle Street targets consumers willing to purchase online
    • UK-based YuLife raises $120m in latest funding round…
    • …and DeadHappy also secures further funding
  11. Competitive Strategies

    • Support measures put into place to support vulnerable customers
    • LV= will continue payment break options for customers
    • AIG offers up to six months of lower premiums
    • Consumers need to feel supported during the current economic circumstances
    • Acquisition and partnership activities continue in the market
    • Aviva partners with Connells Group
    • Neilson Financial Services partners with the Post Office
    • LV= offers wider range of products to Mortgage Advice Bureau advisers
    • Lloyds Banking Group acquires Cavendish Online
    • Access FS partners with Vitality to provide protection training
    • HSBC Life partners with Square Health and UnderwriteMe
    • AIG extends age and cover limits
    • Insurtech disruptors find new consumers to target
  12. Launch Activity and Innovation

    • Legal & General brings hybrid protection-health product to the market
    • Comparison site Reassured launches new digital platform
    • Royal London launches Helping Hand service
    • Bluezone to launch diabetes-specific life insurance
  13. Advertising and Marketing Activity

    • Advertising expenditure increases in 2021-22
      • Figure 37: Total above-the-line, online display and direct mail advertising expenditure on life insurance and over-50s guaranteed acceptance plans, 2017/18-2020/22
    • Neilson is the biggest spender for its Smart Insurance brand
      • Figure 38: Total above-the-line, online display and direct mail advertising expenditure on life insurance (including term assurance), 2020/21-2021/22
    • TV advertising continues to dominate above-the-line spending
      • Figure 39: Total above-the-line, online display and direct mail advertising expenditure on life insurance (including term assurance), by media type, 2019/20-2021/22
    • Upcycled TV campaign
    • Nielsen Ad Intel coverage
  14. Brand Research

    • Brand map
      • Figure 40: Attitudes towards and usage of selected term assurance brands, 2022
    • Key brand metrics
      • Figure 41: Key metrics for selected term assurance brands, 2022
    • Brand attitudes: Legal & General and Royal London have a good reputation
      • Figure 42: Attitudes, by brand, 2022
    • Brand personality: Royal London is perceived as an exclusive brand
      • Figure 43: Brand personality – macro image, 2022
    • Legal & General is viewed as competent and reliable
      • Figure 44: Brand personality – micro image, 2022
    • Brand analysis
    • Consumers perceive Aviva to have great customer service
    • Legal & General has a good reputation
    • Young consumers perceive Vitality as a brand that rewards loyalty
    • Awareness of Royal London highest among over-65s
    • Generation Z perceive Beagle Street to treat customers fairly
  15. Protection Insurance Product Ownership

    • 37% of adults own life insurance
      • Figure 45: Protection insurance product ownership, 2021-22
    • Opportunity to appeal to private renters
      • Figure 46: Life insurance ownership, by housing situation, 2022
  16. Life Insurance Ownership

    • Mortgage-linked products are most popular…
      • Figure 47: Type of life insurance product owned, 2022
    • …although not all homeowners buy a mortgage-linked policy
      • Figure 48: Type of life insurance owned, by those who own a home with a mortgage, 2022
  17. Consideration of Life Insurance

    • Consideration of life insurance remains higher than pre-pandemic
      • Figure 49: Consideration of life insurance, 2019-21
    • Bancassurance channel could help boost uptake
    • Opportunity to demonstrate cover benefits to those with low cash savings
      • Figure 50: Consideration of life insurance, by value of cash savings, 2022
    • Financial resilience will become a key focus for consumers
      • Figure 51: Very likely/likely to consider taking out life insurance, by financial situation, 2022
    • D2C offerings will help to reach new customers
  18. Policy Features

    • There’s an opportunity for hybrid protection-health proposition…
      • Figure 52: Policy features to encourage life insurance uptake, 2022
    • …and access to remote GP services could increase interest by 11%
      • Figure 53: TURF Analysis – Term Assurance, 2022
    • Rewards programmes will incentivise under-35s living at home…
      • Figure 54: Policy features to encourage life insurance uptake, by under-35s living at home, 2022
    • …and could expand to support wider financial wellbeing
  19. Attitudes towards Life Insurance

    • Under-35s most willing to pay for additional benefits
      • Figure 55: Willingness to pay more for additional benefits, by age, 2022
    • Life insurance buyers are interested in price comparison sites…
      • Figure 56: Attitudes towards life insurance of consumers engaged in the market, 2022
    • …but currently only for research
      • Figure 57: Preference for taking out a life insurance policy direct from an insurer, by those who like the idea of a price comparison site that specialises in life insurance, 2022
    • Opportunity to grow life insurance ownership among single-parent families
      • Figure 58: Attitudes towards life insurance, 2022
    • Cross-selling opportunities for those with other protection insurance
  20. Data Sharing Preferences in Life Insurance

    • Majority of consumers are willing to share data…
      • Figure 59: Incentives to share personal and financial data with life insurance provider/adviser, 2022
    • …especially key target groups for term insurance
      • Figure 60: Consumers who are willing to share personal and financial data with a life insurance provider/adviser in exchange for an incentive, by age, 2022
  21. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
    • TURF analysis methodology
      • Figure 61: Table – TURF Analysis – Term Assurance, June 2022
  22. Appendix: Forecast Methodology

    • Market forecast and prediction intervals
    • New term assurance contracts forecast
      • Figure 62: Market forecast for term assurance – new contracts, with prediction interval, 2022-27
    • New term assurance premiums forecast
      • Figure 63: Market forecast for term assurance – new premiums, with prediction interval, 2022-27
    • 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.

Below is a sample report, understand what you are buying.

Click to show report
2024 Sample Consumer Cover

Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted. Our reports are available to download in PDF and PPT formats.

Trusted by companies. Big and small.

Want to speak to us directly?

Contact us with your enquiry and our expert global team can help.

Get in touch