Protection  

Protection sales finish 2015 on a high

Protection sales finish 2015 on a high

Term assurance accounted for 43 per cent of all protection sales in 2015, while mortgage term assurance accounted for 17.8 per cent, data taken from more than 90 insurers showed.

Analysis of protection provider data by Equifax Touchstone showed £117.4m of life cover premiums were sold at the end of 2015, up from £109.3m in the third quarter (an increase of 7.5 per cent).

Sales for the year stood at £452.1m, down 0.3 per cent on the 2014 total of £453.5m.

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The data, which is collated from more than 90 major product providers, with inputs from more than 11,000 advisers, showed term assurance accounted for 43 per cent of protection sales in 2015, while mortgage term assurance accounted for 17.8 per cent.

Critical illness sales for the year grew by 33.3 per cent compared with 2014, and sales of term assurance (including term policies with critical illness incorporated), was up by 11 per cent.

Geoff Greensmith, director at Equifax Touchstone, said: “Protection growth was strong in the last quarter of 2015, driven by sales of pure critical illness policies and also critical illness riders.

“Mortgage term volumes also performed well, underpinned by strong mortgage applications in the third quarter.

“However, we anticipate that mortgage term assurance sales are likely to fall back in the first quarter of this year, given the reduced level of mortgage applications seen towards the end of 2015.”

Quarterly breakdown by type of cover

Type of cover

Q1

Q2

Q3

Q4

Total

Critical illness

£18,422,075*

 

£3,893,332

 

£6,120,978

 

£8,703,178

 

£37,139,563

 

Income protection

£6,497,773

 

£6,975,394

 

£7,033,535

 

£8,157,234

 

£28,663,936

 

Mortgage term

£20,974,252

 

£20,201,542

 

£18,756,186

 

£20,568,591

 

£80,500,571

 

Term

£53,270,797

 

£52,923,965

 

£44,896,025

 

£43,305,957

 

£194,396,744

 

Term with critical illness

N/A*

£17,941,429

 

£22,007,236

 

£25,692,734

 

£65,641,399

 

Whole of life

£12,344,094

 

£11,939,411

 

£10,472,086

 

£11,020,105

 

£45,775,696

 

Total

£111,508,991

 

£113,875,073

 

£109,286,046

 

£117,447,799

 

£452,117,909

 

 *Breakdown between term and term with critical illness was introduced in Q2 2015

               

Adviser View

Justin King, chartered financial planner and registered life planner at Dorset-based MFP Wealth Management, said: “It is always a good sign to hear about increased protection sales because in my experience, which is similar to the industry, there is under-protection in the UK population, i.e. not enough cover.

“So sales is a good thing. Identifying why is another matter – in general it is driven by the mortgage market; [I’m] not sure of the relevance of the re-mortgage market.”