United Kingdom (UK) Protection Insurance – Critical Illness Market

United Kingdom (UK) Protection Insurance – Critical Illness Market Report Overview

The number of contracts in the UK’s individual protection market declined by 5% in 2022 primarily due to inflation and the cost-of-living crisis that has caused financial constraints for many consumers, making it difficult to afford insurance.

The number of contracts in the standalone critical illness market declined by over 4% to 70,600 in 2022. The contracts for critical illness as a rider are much larger than standalone critical illness. However, the number of contracts for standalone critical illness is further likely to rise gradually due to many individuals wanting to protect themselves from the high-interest rates that are affecting mortgages as buying a house is a key driver of critical illness purchases. As the impact of inflation reduces, interest rates fall, and the economy improves, consumer confidence will return, thus increasing the number of contracts sold. The standalone critical illness market will maintain growth at a CAGR of more than 6% during 2023-2027. The rising number of contracts is expected to boost the growth in premiums directly.

UK Protection Insurance – Critical Illness Market Report Outlook 2022-2027 (Number of Contracts)

This report provides an in-depth assessment of the critical illness insurance market, looking at current and historical market size changes in contracts and premiums. It examines how critical illness products are distributed and highlights notable changes in the competitive landscape, as well as the propositions of key market players. The value of claims is also assessed. The report provides five-year forecasts of contracts and premiums to 2027 and discusses how the market, distribution, and products offered are likely to change in the future (as well as the reasons for these changes).

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UK Protection Insurance – Critical Illness Rider Market Segmentation by Contract Types

The key contract types in the UK protection insurance–critical illness rider market are mortgage terms and non-mortgage terms. In 2022, the non-mortgage term segment accounted for the maximum critical illness rider share. The mortgage term segment is yet to recover to pre-COVID levels, driven by the economic difficulties faced during the pandemic and beyond.

UK Protection Insurance – Critical Illness Rider Market Analysis by Contract Types, 2022 (%)

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UK Protection Insurance – Critical Illness Market Segmentation by Channel

The key channels in the UK protection insurance–critical illness market are independent advice, restricted advice, and non-advised. In 2022, independent advice dominated the market, both in terms of premiums and contracts. The growth of this channel can be attributed to the consumers looking for advice on the product, focusing on affordability and the span of illnesses covered.

UK Protection Insurance – Critical Illness Market Analysis by Channel, 2022 (%)

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UK Protection Insurance – Critical Illness Market Segmentation by Disease

The key diseases insurance being claimed for in the UK protection insurance–critical illness market are cancer, heart attack, stroke, Multiple Sclerosis, Benign Brain Tumor, and Parkinson’s among others. In 2022, cancer held the highest UK protection insurance–critical illness market share.

UK Protection Insurance – Critical Illness Market Analysis by Disease, 2022 (%)

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UK Protection Insurance – Critical Illness Market – Competitive Landscape

The key companies in the UK protection insurance – critical illness market are Legal & General (L&G), Aviva, AIG, Royal London, Vitality, and Zurich among others. In 2022, Legal & General (L&G) retained first place with the highest number of critical illness contracts (standalone and rider cover combined), followed by Aviva, and AIG.

UK Protection Insurance – Critical Illness Market Analysis by Companies, 2022 (%)

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Key Segments Covered in the Report

UK Protection Insurance – Critical Illness Market Outlook by Contract Types (%, 2022)

• Mortgage Term
• Non-Mortgage Term

UK Protection Insurance – Critical Illness Market Outlook by Channel (%, 2018-2022)

• Independent Advice
• Restricted Advice
• Non-Advised

UK Protection Insurance – Critical Illness Market Outlook by Disease (%, 2018-2022)

• Cancer
• Heart Attack
• Stroke
• Multiple Sclerosis
• Benign Brain Tumor
• Parkinson’s
• Others

Scope

• The cost-of-living crisis has impacted consumer behavior, with some individuals canceling policies. As a result, insurers should look to come up with more affordable or flexible policies.

• Insurers should look to improve their underwriting capabilities to include those that have chronic conditions, such as Type 2 diabetes. Given that this market is relatively untapped, it opens up the possibility for growth.

• Consumers have been shifting towards the purchase of insurance online, sped up by the pandemic’s impact on digital adoption. The life insurance sector has generally been behind on digitalization; however, shifting consumer dynamics should act as a catalyst for insurers to improve their digital capabilities.

Key Highlights

• The cost-of-living crisis has impacted consumer behavior, with some individuals cancelling policies. As a result, insurers should look to come up with more affordable or flexible policies.
• Insurers should look to improve their underwriting capabilities to include those that have chronic conditions, such as Type 2 diabetes. Given that this market is relatively untapped, it opens the possibility for growth.
• Consumers have been shifting towards the purchase of insurance online, sped up by the pandemic’s impact on digital adoption. The life insurance sector has generally been behind on digitalization; however, shifting consumer dynamics should act as a catalyst for insurers to improve their digital capabilities.

Reasons to Buy

• Examine the size of the standalone critical illness insurance market.
• Identify the leading providers of critical illness.
• Learn about the implications of the cost-of-living crisis on the market.
• Understand the influence of a variety of factors on market growth.