Canada Life has announced its exit from the UK’s consumer protection market despite sales rebounding for providers last year by over 6 per cent.
The insurer said in an announcement yesterday (November 8) following a review of its onshore individual protection business, it is no longer accepting applications for onshore individual protection products.
This includes the withdrawal of its fixed term cover life insurance and critical illness products.
Director of CIExpert, Alan Lakey, said the provider’s immediate exit was “disappointing news” and followed in the footsteps of a handful of other exits from the space over the past ten years.
Insurers including Old Mutual, Scottish Provident, Bupa, and AXA have all taken decisions to shutter their individual protection arms in the UK.
“A vibrant protection sector needs competition to keep prices keen and also to foster innovation which has been lacking over the years,” said Lakey.
“Hopefully this is not a harbinger of things to come over the next few year... The market has been steadily shrinking since 1990 and this has been bad news for consumers and advisers alike.”
In 2021, Swiss Re figures show 2,293,704 new term assurance, whole life, critical illness and income protection policies were sold, an increase of 6.3 per cent from 2020.
Despite the rebound in individual protection sales last year, Canada Life has put an end to its six-year-long stint in the market.
“Our exit from the onshore individual market allows us to refocus on other areas of our business, including group protection and the international (offshore) protection market,” said Canada Life’s managing director for protection, Tim Stoves.
Echoing Lakey, Reassured’s corporate strategy director, Phil Jeynes, said in a market which has lost many high profile brands over recent years, Canada Life’s exit was “disheartening”.
He added: “It highlights the difficulty in making headway in a sector dominated by established, successful firms without a discernible USP.
“Differentiated treatment of vaping customers simply wasn’t enough for Canada Life, despite no shortage of effort from a team of impressive, experienced individuals.”
Lakey also said Canada Life’s individual protection was “truly innovative” in that it offered discounts to vapers when the market view has been to treat them as smokers.
“This approach provided a vital, albeit not widely known, facility for those who have forsaken cigarettes,” he said.
ruby.hinchliffe@ft.com
