ProtectionApr 13 2017

Positive protection market forecast for 2017

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Positive protection market forecast for 2017

Protection advisers largely predict a stable outlook for the market during the next year, despite a potentially challenging economic climate.

An online survey of 202 UK advisers by Royal London revealed most of those who currently sell life insurance, critical illness cover and income protection say they will continue to do so over the next 12 months.

Royal London has launched a new confidence index focusing on advisers’ perceived relevance of protection products and their ability to meet or adapt to customers’ needs, with the initial score a healthy 60.75 out of 100.

The positive outlook follows a stable 2016, in which 6 in 10 advisers said they had sold a similar amount of life insurance and critical illness cover in the last 12 months compared to the previous year, with half saying they had sold a similar amount of income protection.

One in four advisers expect to see a rise in sales of life insurance over the next 12 months, with a similar number hopeful about future opportunities in general. 

But the optimistic mood is not shared by everyone in the industry, with 1 in 10 predicting they will make fewer income protection sales this year.

Moreover, one in four of those surveyed admitted they had found it harder to sell income protection and critical illness cover over the past 12 months.

The findings are published in Royal London’s first Adviser State of the Protection Nation report.

Debbie Kennedy, group head of protection strategy at Royal London, commented: “I’m pleased to see that the first State of the Protection Nation Adviser Confidence Index has started at a healthy level. I hope that this will continue.  

“Despite advisers saying that sales of some protection products are proving difficult, providers are looking at ways to use data and technology to grow the market and I hope our efforts will translate into an increase in sales over the year.”

Dominic Basilea, director at St Albans-based Aqua Wealth Management, is rather less sanguine about the market’s prospects in 2017.

“Personally, I fear there is something on the horizon, because we have got too many unpredictables,” he said. 

“There are all the elections coming up in Europe and the crisis in Syria is still going on, and there is the situation with the US and Korea so lots of potential negatives.

“Does that mean the markets will crash? I don’t know. I am personally very concerned, and we try to make sure our clients can see those negatives.”

 

simon.allin@ft.com