Scottish Widows has confirmed to FTAdviser that it is relaunching into the protection adviser market in 2015, following a review launched in 2012 into whether to broaden distribution beyond branches of parent Lloyds Banking Group.
A spokesperson for the firm revealed the provider would be initially launching a product offering for life assurance and critical illness, though internal discussions on the specifics of the products are still ongoing.
According to a SwissRe report last year, Scottish Widows is a top three manufacturer across the three protection segments of life, critical illness and income protection. For life and CI overall it was the second largest manufacturer by volume in 2013, while for CI and IP individually it was second and third largest respectively.
The firm currently distributes exclusively through Lloyds Banking Group branches, which makes Lloyds’ bancassurance arm the largest distributor of protection products in the UK.
A report published by Scottish Widows earlier this year laid bare the scale of underprotection in the UK, revealing that half of all homeowners in the UK have no life insurance, while less than one in five and one in ten respectively have either critical illness or life insurance.
The study, carried out by YouGov among 5,221 adults, found that mortgage holders accounted for 75 per cent of critical illness and 69 per cent of income protection policies in force, but that even among this group only 50 per cent had any life cover, just 17 per cent CI and 7 per cent IP.
The results echo a separate YouGov study carried out on behalf of Friends Life in the first quarter of this year, which revealed of 2,031 people surveyed only 4 per cent have income protection, 7 per cent have critical illness cover and 23 per cent have life insurance.
Scottish Widows’ confirmed re-entry follows Skandia’s move to re-enter the CI market last year, which it said reflected a “re-prioritisation” of protection by financial advisers in the wake of the Retail Distribution Review.