bridging the protection gaps a simple solution rw protect 260912
DESCRIPTION
A presentation to the Protect Association on 26/9/12TRANSCRIPT
Bridging the Protection Gaps - a simple solution?Ron Wheatcroft, Protect 26 September 2012
Ron Wheatcroft | Protect 26 September 2012
The Protection Gaps - ten years on
Market performance - individual business
Market performance – group risk business
The future?
Consumer expectations
2
Agenda
Ron Wheatcroft | Protect 26 September 2012
The Protection Gaps –ten years on
3
Ron Wheatcroft | Protect 26 September 2012 4
The Protection Gaps – ten years on
Ron Wheatcroft | Protect 26 September 2012
Individual protection business
5
Ron Wheatcroft | Protect 26 September 2012 6
Total new individual term policy sales – split by stand alone term and term with CI rider, 2007 - 2011
1,0
59
,82
7
98
5,1
44
1,0
31
,62
5
1,0
37
,44
6
96
4,2
25
48
2,1
03
46
2,7
51
47
6,0
60
50
3,3
52
52
3,8
81
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2007 2008 2009 2010 2011Stand alone term Term with ACCI Year
Ron Wheatcroft | Protect 26 September 2012 7
Total new individual whole life policy sales, unit-linked, non-linked and guaranteed acceptance plans, 2007 - 2011
219,362
282,438
318,078
371,467
400,682
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2007 2008 2009 2010 2011
YearWL sales
Ron Wheatcroft | Protect 26 September 2012 8
Total new individual income protection policy sales, 2007 – 2011
111,780
126,815
117,288
110,743 110,472
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2007 2008 2009 2010 2011IP sales Year
Ron Wheatcroft | Protect 26 September 2012
2011 sales figures flat with the exception of new whole life sales (largely guaranteed acceptance)
Individual term sales impacted by sluggish mortgage market
Retail IP - a lost cause?
9
The individual protection market
Ron Wheatcroft | Protect 26 September 2012
Group risk business
10
Ron Wheatcroft | Protect 26 September 2012 11
Group risk in force premium income (premiums rounded to the nearest £1,000)
Product 2007 2008 2009 2010 2011
Group life 910,775,162 945,210,629 897,285,619 918,635,231 956,074,087
Group CI 37,230,015 45,403,103 48,393,386 50,252,281 55,005,102
Group IP 640,931,111 648,902,366 567,971,284 517,385,394 517,995,843
Ron Wheatcroft | Protect 26 September 2012
Has consistently provided around 40% of all insured death benefits in the UK
Now provides 75% of all insured income protection benefits (has risen from 70% in 2002)
In addition, a number of employers choose to retain some or all of the cover promised to their workforce
Group CI is a small, but growing, market – is this the simplicity of the message?
Around 10% of all premiums are now flex or voluntary
12
The group risk market
Ron Wheatcroft | Protect 26 September 2012
RDR good for protection sales?
Gender-neutral pricing - buy now while stocks last – but what next?
I-E
Mortgage Market Review
The Dilnot Review into social care funding
Auto-enrolment - impact on employers and employees
The EU agenda – IMD2, extending the gender ban to age and disability?
Financial exclusion - simple products? How to turn on consumers
13
The future
Ron Wheatcroft | Protect 26 September 2012
Consumer expectations
14
Ron Wheatcroft | Protect 26 September 2012
47%
55%
63%
63%
80%
12%
16%
4%
12%
2%
32%
21%
22%
16%
10%
9%
9%
11%
9%
8%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Income in retirement
Income after redundancy
Rehabilitation and convalescence
Income during long-term illness
Nursing care for the very old
Government Employer Individual Don't know
Whose responsibility is it today?
Ron Wheatcroft | Protect 26 September 2012
Whose responsibility in 10 years’ time?
23%
27%
27%
31%
35%
6%
8%
3%
7%
2%
55%
47%
52%
44%
45%
16%
17%
19%
17%
18%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Income in retirement
Income after redundancy
Rehabilitation and convalescence
Income during long-term illness
Nursing care for the very old
Government Employer Individual Don't know
Ron Wheatcroft | Protect 26 September 2012
Which insurance products or benefits do you have?
0%
10%
20%
30%
40%
50%
60%
Life insurance Critical illness Death-in-service
benefit
Income protection Mortgage-payment
protection
Full pay from
employer if
ill/ disabled
None of the above
2009 2011
Ron Wheatcroft | Protect 26 September 2012
What’s your main reason for not buying life insurance, critical illness cover or income protection?
-10%
0%
10%
20%
30%
40%
50%
60%
Can't afford it Don't need it Haven't thought about it
Haven't got around to it yet
Don't trust insurance companies
Difficult to calculate how
much cover you need
Have enough insurance
already
My employer pays for it
Life insurance Critical illness Income protection
Ron Wheatcroft | Protect 26 September 2012
Assuming you need life insurance cover of £100,000 how much would you be willing to pay for this a month?
0%
10%
20%
30%
40%
50%
60%
£0 - £5 £6 - £10 £11 - £15 £16 - £20 £21 - £25 £26 - £50 £51+ Don't know
Ron Wheatcroft | Protect 26 September 2012
"Insurance needs to be honest, clear and jargon free."
"Providers need to be seen to be working with you, providing a product where both of you would get some value."
"If anyone’s telling you anything, you’ve got to understand the benefits of having it."
Bridging the Protection Gaps - a simple solution?Ron Wheatcroft, Protect 26 September 2012
Thank you