Direct to consumer term assurance sales soared 216 per cent last year, stealing market share from banks where sales halved.
Data compiled by Swiss Re for its annual Term and Health Watch showed the number of UK life insurance policies sold without an intermediary jumped to 115,633 last year, up from 36,586 in 2014.
At the same time, sales of the policy via banks plummeted 48 per cent.
In 2014 bancassurance advisers sold 234,278 new policies, which fell to 122,250 last year.
Swiss Re reported around 25,000 of the direct to consumer sales are accounted for by the report’s authors redefining its distribution channels when collecting the data.
But Ron Wheatcroft, technical manager at Swiss Re, said overall the figures show direct to consumer propositions are appealing to more of the life sector’s potential customers.
The vast majority of life cover is still sold via intermediaries, however, with around 1.1 million policies sold by directly authorised, tied or bancassurance advisers last year.
“While most term assurance business is still placed through traditional distribution channels, it is good to see that direct to consumer propositions are appealing to more of our potential customers,” Mr Wheatcroft said.
“This is a very good start: our challenge will be to extend this to more complex areas such as protection against disability risks if consumers wish to buy in that way.”
He said technology will help grow the industry, but added life companies and advisers needs to speak to consumers in “plain and jargon-free language”.
“Otherwise, people will just step away.”
The report also found new term-only policy sales rose slightly to be up 2.4 per cent, while term with critical illness sales decreased by 9.7 per cent, mainly a result of lower mortgage-related product sales.
This resulted in a decline in total new term assurance sales for 2015 of 1.8 per cent.
Decreasing term assurance sales, with and without critical illness cover, fell by 10.5 per cent from 471,044 in 2014 to 421,756.
Income protection sales grew by 10.7 per cent, and guaranteed acceptance whole life sales increased by 7.4 per cent from 261,137.
New underwritten whole life sales increased by 6.9 per cent from 30,810 in 2014 to 32,937.
Maxine Udall, marketing and research manager at Swiss Re and author of the report, said: “It is great to see new sales of pure term life, income protection and whole life cover increasing.
“People need to take action to protect their mortgage commitments against financial shocks. This will lead to greater consumer resilience and a better-protected mortgage book for lenders.
“While consumers now go through a more rigorous approach when taking out a mortgage loan, circumstances can change and the industry owes it to customers to point this out. Protecting income commitments for so-called Generation Rent is just as important.”
Mark Dennison, principal at intermediary LightBlue UK, said he was “pleasantly surprised” by the findings.
He said: “It is encouraging to see a rise in income protection sales, which bucks the trend of previous years. Maybe it reflects a sign of the uncertainty in the workplace some people are feeling, combined with the fact providers are definitely promoting income protection more.