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Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Critical Illness Cover - UK market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

In 2019, new premiums of critical illness insurance grew for the fourth consecutive year, with the value of new premiums up 2.8% to £291 million. The volume of new policies increased even faster over the past two years, increasing 9.2% in 2019. This has resulted in a drop in average premiums, reflecting a competitive market. In 2018, Guardian entered the top-end of the market and has since set new benchmarks in terms of coverage for the rest of the industry to follow.

Expert analysis from a specialist in the field

Written by Thomas Slide, a leading analyst in the Health sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Thomas Slide
Senior Health Analyst

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What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Fourth consecutive year of market growth
              • Figure 1: Forecast of new individual critical illness premiums, at current prices, 2014-24
            • 91% of policies are sold as a rider benefit
              • Rise in non-advised policies
                • Figure 2: Channels to market, new critical illness policies, 2015-19
              • Fall in housing transactions but high levels of first-time buyers
                • Companies and brands
                  • L&G remains the market leader
                    • Figure 3: Market shares by volume of new individual critical illness premiums, 2018
                  • Simplifying language to improve appeal
                    • Boosting cover at key life stages
                      • The consumer
                        • One in 10 has critical illness cover
                          • Figure 4: protection insurance ownership, December 2019
                        • More than half of 18-24s would consider cover
                          • Figure 5: Consideration of critical illness cover, December 2019
                        • Peace of mind drives purchases
                          • Figure 6: Reasons for taking out critical illness cover, December 2019
                        • A fifth won’t consider a policy because they don’t trust insurers
                          • Figure 7: Reasons for not considering taking out critical illness cover, December 2019
                        • 45% pay less than £40 a month
                          • Figure 8: Reality versus perception on cost of critical illness cover, December 2019
                        • Over half of households lack financial resilience
                          • Figure 9: Financial resilience, December 2019
                        • Young people are overly reliant on credit and family/friends
                          • Figure 10: How they would fund a period of illness or disability, December 2019
                        • Lack of faith in payouts
                          • Figure 11: Attitudes towards critical illness cover, December 2019
                        • What we think
                        • Issues and Insights

                          • Adapting to the challenge of less predictable lifestyles
                            • The facts
                              • The implications
                                • Progress made on transparency and simplification but still a way to go
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • Fourth consecutive year of market growth
                                        • 91% of policies are sold as a rider benefit
                                          • Rise in non-advised policies
                                            • Fall in housing transactions but high levels of first-time buyers
                                            • Market Size and Forecast

                                              • Fourth consecutive year of growth
                                                • Slow and steady growth forecast
                                                  • Figure 12: Forecast of new individual critical illness premiums, at current prices, 2014-24
                                                  • Figure 13: Forecast of new individual critical illness premiums, at current prices, 2014-24
                                                • Strong growth in new policies looks set to slow
                                                  • Figure 14: Forecast of new individual critical illness policy sales, 2014-24
                                                  • Figure 15: Forecast of new individual critical illness policy sales, 2014-24
                                                • Forecast methodology
                                                • Market Segmentation

                                                  • Vast majority of policies are sold as a rider benefit
                                                    • Figure 16: Market segmentation, 2015-19
                                                  • Mortgage term cross-sell rate drops slightly
                                                    • Figure 17: Critical illness rider, cross-sell rate, 2015-19
                                                • Channels to Market

                                                  • Rise in non-advised policies
                                                    • Figure 18: Channels to market, new critical illness policies, 2015-19
                                                  • A quarter of other term riders are non-advised
                                                    • Figure 19: Channels to market, by market segmentation, 2019
                                                • Market Drivers

                                                  • Covid-19 could encourage discussions around protection insurance
                                                    • People perceive themselves to be healthier than they are
                                                      • Housing transactions fall
                                                        • Figure 20: UK residential property transactions over £40,000, 2010-19
                                                      • Changing housing tenure presents challenges and opportunities
                                                          • Figure 21: Buying with a mortgage, by age of the household reference person, 2003/04-2018/19
                                                        • Dementia and Alzheimer’s disease are the leading cause of death
                                                          • Figure 22: Leading causes of death in England and Wales, 2018
                                                        • Over 90% of claims are paid out
                                                          • Figure 23: Critical illness claims, 2015-18
                                                        • Big three conditions account for 81% of claims
                                                          • Figure 24: Reason for claims (volume), 2018
                                                        • The changing nature of work
                                                          • Figure 25: Proportion of the working population in self-employment, 1992-2019
                                                      • Companies and Brands – What You Need to Know

                                                        • L&G remains the market leader
                                                          • Simplifying language to improve appeal
                                                            • Boosting cover at key life stages
                                                            • Market Share

                                                              • L&G remains the market leader
                                                                • Strong growth for Vitality and Royal London
                                                                  • Slower volume sales for Aviva
                                                                    • Figure 26: Volume sales and market shares of the top five providers of new individual critical illness cover, 2017 and 2018
                                                                • Competitive Strategies

                                                                  • Reducing complexity to increase understanding
                                                                    • Making claims easier
                                                                      • Transparency around payouts
                                                                        • Lower payouts for less severe conditions
                                                                          • Do you remember… Seven Families?
                                                                            • Boosting cover at key life stages
                                                                              • Designing products for the growing rental market
                                                                              • The Consumer – What You Need to Know

                                                                                • One in 10 has critical illness cover
                                                                                  • More than half of 18-24s would consider cover
                                                                                    • Peace of mind drives purchases
                                                                                      • A fifth won’t consider a policy because they don’t trust insurers
                                                                                        • 45% pay less than £40 a month
                                                                                          • Over half of households lack financial resilience
                                                                                            • Young people are overly reliant on credit and family/friends
                                                                                              • Lack of faith in payouts
                                                                                              • Protection Insurance Ownership

                                                                                                • 41% have some kind of protection insurance in place
                                                                                                  • Figure 27: protection insurance ownership, December 2019
                                                                                                • Critical illness cover peaks among 25-34 year olds
                                                                                                  • Figure 28: Critical illness cover ownership, by age group, December 2019
                                                                                                • Renters lack cover, but reaching them will prove challenging
                                                                                                  • Figure 29: Critical illness cover ownership, by housing tenure, December 2019
                                                                                              • Consideration of Critical Illness Cover

                                                                                                • Less than a quarter would consider cover
                                                                                                  • Figure 30: Consideration of Critical Illness Cover, December 2019
                                                                                                • Private renters are just as likely to consider critical illness cover
                                                                                                  • Figure 31: Consideration of critical illness cover, by housing tenure, December 2019
                                                                                              • Reasons for Taking out Critical Illness Cover

                                                                                                • Peace of mind is the main reason to take out cover
                                                                                                  • Figure 32: Reasons for having critical illness cover, December 2019
                                                                                                • Appealing to those looking to support children
                                                                                                  • Figure 33: Reasons to consider taking out critical illness cover, December 2019
                                                                                              • Reasons for not Considering Critical Illness Cover

                                                                                                • Many don’t see a need for cover
                                                                                                  • Figure 34: Reasons for not considering taking out critical illness cover, December 2019
                                                                                                • Those who need protection the most, are least able to be able to afford it
                                                                                                  • Trust remains an issue
                                                                                                    • Figure 35: Reasons for not considering critical illness cover, by financial resilience, December 2019
                                                                                                • What Consumers Pay and Expect to Pay for Critical Illness Cover

                                                                                                  • 45% pay less than £40 a month
                                                                                                    • Figure 36: What consumers pay for critical illness cover, December 2019
                                                                                                  • Most people have a good idea of cost
                                                                                                    • Figure 37: Reality versus perception on cost of critical illness cover, December 2019
                                                                                                  • But young people may be overestimating the cost of cover
                                                                                                      • Figure 38: Pricing perceptions of critical illness cover, by age group, December 2019
                                                                                                  • Important Factors in Choosing a Critical Illness Provider

                                                                                                    • Quality is the most important factor
                                                                                                      • Figure 39: Important factors when choosing a critical illness cover provider, December 2019
                                                                                                  • Financial Resilience

                                                                                                    • A third are confident in their financial resilience
                                                                                                      • Figure 40: Financial resilience, December 2019
                                                                                                    • Self-employed and part-time workers lack resilience
                                                                                                      • Figure 41: Financial resilience, by employment status, December 2019
                                                                                                    • Women feel more financially vulnerable than men
                                                                                                      • Figure 42: Financial resilience, by age and gender, December 2019
                                                                                                    • A third of financial strugglers would consider critical illness cover
                                                                                                      • Figure 43: Financial resilience, by likelihood to consider taking out critical illness cover, December 2019
                                                                                                  • Sources of Funding for Lost Income

                                                                                                    • Savings are the main source of emergency funding
                                                                                                      • Those relying on sick pay may overestimate what they can get
                                                                                                        • Figure 44: How they would fund a period of illness or disability, December 2019
                                                                                                      • Young people more likely to rely on friends, family and credit
                                                                                                        • Figure 45: How they would fund a period of illness or disability, by average age and affluence, December 2019
                                                                                                      • Overconfidence leaves young people potentially exposed
                                                                                                        • Figure 46: How they would fund a period of illness or disability, by age group, December 2019
                                                                                                    • Attitudes Towards Critical Illness Cover

                                                                                                      • Clarity of language is required
                                                                                                        • Trust is in short supply
                                                                                                          • Figure 47: Attitudes towards critical illness cover, December 2019
                                                                                                        • A lack of understanding among younger people
                                                                                                          • Figure 48: Misperceptions about critical illness cover, by age group, December 2019
                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                          • Abbreviations
                                                                                                            • Consumer research methodology
                                                                                                            • Appendix – Market Size and Forecast

                                                                                                              • Total market sales forecast – best- and worst-case scenarios
                                                                                                                • Figure 49: Forecast of critical illness insurance premiums – best- and worst-case scenarios, by value of new premiums, 2019-24
                                                                                                                • Figure 50: Forecast of critical illness insurance premiums – best- and worst-case scenarios, by number of new policies, 2019-24
                                                                                                              • Forecast methodology

                                                                                                              About the report

                                                                                                              This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                                                                              • The Consumer

                                                                                                                What They Want. Why They Want It.

                                                                                                              • The Competitors

                                                                                                                Who’s Winning. How To Stay Ahead.

                                                                                                              • The Market

                                                                                                                Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                                                                              • The Innovations

                                                                                                                New Ideas. New Products. New Potential.

                                                                                                              • The Opportunities

                                                                                                                Where The White Space Is. How To Make It Yours.

                                                                                                              • The Trends

                                                                                                                What’s Shaping Demand – Today And Tomorrow.

                                                                                                              Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

                                                                                                              Description