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UK Whole of Life Insurance market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Whole-of-Life Insurance 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 and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Report scope and definition

This Report gives an overview of the whole-of-life market, including examination of the size of the market and a forecast for the next five years, and discussion of the main factors affecting the market. The major players in the market are discussed, as well as recent product developments and marketing strategies.

Mintel’s exclusive consumer research measures ownership of life insurance and explores attitudes towards these products, including why they chose to take out a life insurance policy, and how they chose and arranged their policies. The Report also looks at which policy features are most popular, and the barriers to ownership among those who do not own a policy.

For the purposes of this Report, Mintel has used the following definitions:

Underwritten whole-of-life insurance is a long-term policy designed to pay a cash lump sum when the policyholder dies. These policies are underwritten and therefore take into consideration a person’s personal circumstances and medical history when calculating premiums. Whole-of-life policies typically offer a higher insured sum than guaranteed acceptance policies, these policies are typically used by more affluent consumers as a form of financial planning to offset inheritance tax liabilities. Some providers have started to offer additional options for covering care costs.

Over-50s guaranteed acceptance insurance is a long-term policy that will pay a cash lump sum when the policyholder dies. But these policies are not underwritten and do not require a customer to divulge information about their medical history. These policies typically have lower premiums than underwritten wholeof-life policies and may provide additional benefits, for example funeral benefits. Traditionally, there is no cash-in value to these policies; which meant that if a consumer cancels the policy they will not be entitled to any benefits. However recent developments are giving consumers more flexibility with their policies, distorting the distinction between guaranteed acceptance and whole-of-life policies.

Pre-paid funeral plans have been created to ensure that funeral costs are covered when a person passes away. These plans have a set monthly premium that once paid will cover the costs of a funeral, regardless of inflation or price increases in the funeral market.

What you need to know

Ever since the exit of high street banks from the industry in 2012, the whole-of-life market has been in decline, with the slight recovery in 2015 proving to be an outlier over this period. The market appears to have grown fairly stale over the past five years, with precious little product innovation visible in the market.

Nevertheless, with an ageing population and a large proportion of over-50s lacking significant savings, there is scope for the market to recover and return to growth. The impact of GDPR and Open Banking will cause providers to rethink and modernise their advertising and innovation strategies, while new developments designed to support dependents could result in a brighter future for the whole-of-life market.

Expert analysis from a specialist in the field

Written by Douglas Kitchen, a leading analyst in the Financial Services sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The whole-of-life market has experienced a difficult period over the past five years but there are signs that this may be coming to an end. A large portion of over-50s have little in the way of savings, providing an opportunity for insurers to provide a cheap route to providing security for dependents. If providers are able to provide innovative new products, whilst simultaneously adapting their advertising campaigns to the increasingly youthful minded over-50s, the market could be set for a return to growth. Douglas Kitchen
Financial Services Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Report scope and definition
      • Executive Summary

          • The market
            • New premiums fell to £96 million in 2017
              • Figure 1: Forecast for total value of new whole-of-life premiums, 2013-2023
            • 85% of all sales in 2017 were made without advice
              • Figure 2: Whole-of-life and guaranteed acceptance sales channels, 2016 and 2017
            • Companies and brands
              • SunLife is the biggest provider of whole-of-life insurance
                • Figure 3: Market share of top five product providers, measured by new individual whole-of-life sales*, 2017
              • The consumer
                • Confusion over product ownership
                  • Figure 4: Life insurance product ownership, April 2018
                • Direct mail an unpopular route to ownership
                  • TV advertising dominates in guaranteed acceptance market
                    • Figure 5: Sources used when choosing life insurance policy, by product ownership, April 2018
                  • Over-50s’ online usage growing
                    • Figure 6: How over-50s arranged their life insurance policy, by age, April 2018
                  • Low payments and guaranteed payback schemes are the most appealing features
                    • Figure 7: Interest in new whole-of-life features, by age, April 2018
                  • Under-55s more likely to have other spending priorities
                    • Figure 8: Reasons for not holding a life insurance policy, by age, April 2018
                  • What we think
                  • Issues and Insights

                    • Reinvigorate advertising to increase ownership
                      • The facts
                        • The implications
                          • Significant innovation needed
                            • The facts
                              • The implications
                              • The Market – What You Need to Know

                                • New premiums fell to £96 million in 2017
                                  • Guaranteed acceptance plans account for 84% of policies
                                    • 85% of all sales in 2017 were made without advice
                                      • Over-50s market continues to grow
                                      • Market Size and Forecast

                                        • Period of decline continues…
                                          • Figure 9: Whole-of-life and guaranteed acceptance new contracts and premiums, 2013-17
                                        • …but the whole-of-life market is set for recovery
                                          • Figure 10: Forecast for total value of new whole-of-life premiums, 2013-23
                                          • Figure 11: Forecast for total value of new whole-of-life premiums, 2013-23
                                        • Forecast methodology
                                        • Market Segmentation

                                          • Guaranteed acceptance plans account for 84% of policies
                                            • Underwritten market indicates end of significant decline
                                              • Figure 12: New contract distribution, by product type, 2013-17
                                            • Underwritten premiums fall below guaranteed acceptance
                                              • Figure 13: Value of new whole-of-life and guaranteed acceptance premiums, 2013-2017
                                          • Channels to Market

                                            • Non-advised underwritten whole-of-life sales outstrip independent advice sales for the first time.
                                              • Figure 14: Whole-of-life and guaranteed acceptance sales channels, 2016 and 2017
                                            • Advisers still play a key role
                                              • Figure 15: Sources used when choosing most recent life insurance policy, April 2018
                                            • Direct mail an inefficient use of advertising spend
                                            • Market Drivers

                                              • Over-50s population continues to grow
                                                • Figure 16: Population projections, 2017-40
                                              • Over 65s feeling more secure…
                                                • Figure 17: Consumers’ current financial situation, by age, march 2018
                                              • …and more optimistic for the future
                                                • Figure 18: Consumers’ current financial situation, by age, march 2018
                                              • Whole-of-life insurance can help those with little savings
                                                • Figure 19: Value of savings and investments, by age, March 2018
                                            • Regulatory and Legislative Changes

                                              • Inheritance tax changes yet to come into fruition
                                                • Introduction of property related allowance could impact market
                                                  • New insurance regulation adds clarity to an ‘advised’ sale
                                                    • Companies forced to adapt to GDPR
                                                      • Government makes reforms to Funeral Payments
                                                      • Companies and Brands – What You Need to Know

                                                        • SunLife is the biggest provider of whole-of-life insurance
                                                          • Whole-of-life policies continue to expand reach and flexibility
                                                            • Despite difficulties, adspend continues to increase
                                                              • Over-50s life insurance adspend increased by 8% in 2017/18
                                                              • Market Share

                                                                • SunLife retains market dominance
                                                                  • Figure 20: Top five product providers, measured by new individual whole-of-life sales*, 2016 and 2017
                                                                • One Family enters top 5
                                                                • Competitive Strategies

                                                                  • Gift cards still central to strategy for major players
                                                                    • Lowest available premiums continue to tumble
                                                                      • AIG and Zurich focus on speed of delivery
                                                                        • Serious illness cover the selling point for Vitality, Royal London and One family.
                                                                          • British Seniors introduces new ‘Cash in’ option
                                                                            • New entrants to utilise Open Banking
                                                                            • Advertising and Marketing Activity

                                                                              • Over-50s life insurance adspend increased by 8% in 2017/18
                                                                                • Figure 21: Total above-the line, online display and direct mail advertising expenditure on life Insurance Products 2015/16-2017/18
                                                                              • SunLife is the highest-spending advertiser
                                                                                • Figure 22: Total Above- the line, online display and direct mail advertising expenditure for top 10 advertisers of over-50s life insurance, 2015/16-2017/18
                                                                              • Top four all increased adspend
                                                                                • TV and direct mail dominate advertising
                                                                                  • Figure 23: Total above-the line, online display and direct mail advertising of over-50s life insurance, by media type, 2017/18.
                                                                                • Other advertising activity
                                                                                  • Nielsen Ad Intel coverage
                                                                                  • The Consumer – What You Need to Know

                                                                                    • Confusion over product ownership
                                                                                      • Funeral plans a decreasing factor for policy owners
                                                                                        • Over-50s’ online usage growing
                                                                                          • Low payments and guaranteed payback schemes are the most appealing features
                                                                                            • Under-65s more likely to have other spending priorities
                                                                                            • Life Insurance Ownership

                                                                                              • A fifth of over-50s own some form of whole-of-life insurance
                                                                                                • Figure 24: Life insurance product ownership, April 2018
                                                                                              • Consumers appear confused about what type of policy they have
                                                                                                • New innovation may cause further confusion
                                                                                                  • Higher earners more likely to have underwritten whole-of-life cover
                                                                                                    • Figure 25: Product ownership, by household income, April 2018
                                                                                                • Reasons for Purchase

                                                                                                  • Dependents the priority for whole-of-life policyholders…
                                                                                                    • Figure 26: Life insurance purchase triggers, by product ownership, April 2018
                                                                                                  • …but funeral plans a decreasing factor since 2016
                                                                                                    • Figure 27: Consumers’ reasons for purchasing life insurance, 2016 and 2018
                                                                                                • Purchase Journey

                                                                                                  • Face-to-face the preferred method when arranging a policy
                                                                                                    • Online usage set to increase for over-50s market
                                                                                                      • Figure 28: How over-50s arranged their life insurance policy, by age, April 2018
                                                                                                  • Interest in Policy Features

                                                                                                    • Low payments and guaranteed payback schemes are the most appealing features
                                                                                                      • British Seniors guaranteed payback is no more
                                                                                                        • Figure 29: Interest in new whole-of-life features, by age, April 2018
                                                                                                      • Retirees need convincing
                                                                                                        • Figure 30: Interest in new whole-of-life features, by employment status, April2018
                                                                                                      • Non-financial benefits are unpopular among non-policy holders
                                                                                                        • Figure 31: Interest in new whole-of-life features, by life insurance ownership, April 2018
                                                                                                    • Barriers to Ownership of Life Insurance

                                                                                                      • Under-55s more likely to have other spending priorities…
                                                                                                        • Figure 32: Reasons for not holding a life insurance policy, by age, April 2018
                                                                                                      • …while a quarter of over-65s have made other plans
                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                              • Best case and worst case forecast for total value of whole-of-life market
                                                                                                                • Figure 33: Best-and worst-case forecast for total value of new whole-of-life premiums
                                                                                                              • Forecast methodology