Strong protection insurance sales in the first quarter from Aegon and Royal London have prompted confidence from providers and advisers alike.
This morning (12 May), Aegon UK reported first quarter profits of £18.2m, reversing losses in the previous three months through a higher contribution from its protection business, which saw sales increase 18 per cent.
The company put this down to improved persistency and lower expenses, higher new business sales on the back of new distribution panel positions secured and higher new business margins.
Dougy Grant, Aegon UK’s protection director, also suggested first quarter performance was driven by a new sales model introduced last year.
“It’s taken a while to bed in and establish new relationships, but key accounts can now get phone support along with face to face, so when a business development manager is unavailable, advisers can still have enquiries answered.”
He added: “I’m relatively bullish on protection market growth potential, especially in the high-net worth and corporate space. Advisers are becoming aware that it should form part of a holistic proposition.”
Meanwhile, Royal London saw life and pensions business of £2.09bn in the first quarter, up 52 per cent year-on-year.
Protection sales via intermediaries reached £147m, an increase of 37 per cent on the first quarter last year, while direct to consumer sales reached £67m, an rise of 179 per cent.
Debbie Kennedy, head of protection at Royal London, said feedback from advisers and customers to their new proposition and enhanced service platform has been encouraging since the rebrand at the start of this year.
“We’ve experienced strong sales across our proposition, which is an interesting development. There are a number of reasons for this, such as the continued success of the Seven Families initiative and added value support services for customers such as our Helping Hand.
“I’m optimistic about the protection market; we are currently looking at ways we can use advances in technology to improve the underwriting journey to make the process simpler and quicker for the benefit of both advisers and customers.”
In March, Equifax Touchstone’s analysis of protection provider data showed £117.4m of life cover premiums were sold at the end of 2015, up 7.5 per cent from £109.3m in the third quarter.
Overall sales for the year stood at £452.1m, down 0.3 per cent on the 2014 total of £453.5m.
However, critical illness sales for the year grew by a third on the 2014 figures, and sales of term assurance (including term policies with critical illness incorporated) were up by 11 per cent.
Mark Dennison, principal at LightBlue UK, said if insurers are seeing better sales figures, it is hopefully a sign protection as a whole is on the up, rather than just benefiting a few firms.
“The Seven Families campaign has been running since 2014 and that will most likely have played an important part in sales, particularly income protection, having increased recently.
“In particular, it seems brokers are becoming more aware of the need for protection advice as the bedrock of good financial planning and the important role protection plays in it. This will leads to providers seeing stronger sales.”
peter.walker@ft.com
