Critical Illness Cover - UK : Market Research Report

Critical Illness Cover - UK

Published by: Mintel International Group Ltd.

Published: Feb. 1, 2008 - 121 Pages

Issues in the Market: Report coverage; Key issues in the market; Product definitions; Abbreviations
Market in Brief: Sales of CIC decline by more than 50%; Housing market slowdown will lead to decline in CIC sales; Legal & General takes top place; CIC is well positioned in a crowded protection market; Attempts to tackle proportion of rejected claims; Some signs of innovation; Future challenges for the CIC market; Adviser channels continue to dominate CIC sales; Key consumer findings; Awareness and cost are main barriers
Internal Market Environment: Key points; Protection market faces a £2.3 trillion protection gap; 80% of CIC sales are linked to life insurance policies; Short-term impact of PTA; CIC illness premiums fall…; …but not in line with the cost of life cover; Cancer dominates CIC claims; Cancer cases have increased by 25% since 1975; Cancer mortality rates drop by 16%; Other major critical illnesses; Impact of lifestyle factors on critical illness cover; Genetic testing - set for a review in 2008
Broader Market Environment: Key points; Property transactions have been on an upward trend…; ...however, housing market slowdown will hit CIC sales; CIC sales suffer as number of first-time buyers falls; Cautious economic outlook presents tough conditions for CIC market; Life-expectancy continues to rise; Growth in one-person households is opportunity for CIC industry
Industry, Regulatory and Legislative Developments: Key points; Rejected claims undermine consumer confidence; Non-disclosure remains industry priority; ABI publishes new definitions and guidelines; Other developments
Competitive Context: Key points; A plethora of protection products; Range of products leads to customer confusion; Critical Illness Cover vs Income Protection; Why is CIC more popular?; MPPI sales reflect trends in mortgage market; One in ten opt for unemployment cover only; Disease-specific cover
Strengths and Weaknesses in the Market: Strengths in the market; Weaknesses in the market
Market Size and Forecast: Key points; Market size data; Sales of CIC continue to decline; Mortgage-related sales account for 61% of new business in 2006; Industry expects greater focus on non-mortgage-related sales; Average sum assured increases as house prices continue to rise; Volume of new business falls by 35% since 2000; Value of new business falls by 32% since 2000; Term assurance accounts for 96% of all ACCI sales; Sales of group CIC cover are in decline; Group CIC business in force - membership down but premiums up; CIC market forecast to decline by 12% in 2008; Some potential to outgrow forecast; Factors used in the forecast
Market Share: Key points; Legal & General lead market share for new CIC sales; Top providers are losing market share; Legal & General top life company rankings
Companies and Products: Product evolution; Key market developments; Selected claims data; Key players in group critical illness market; Company profiles of leading insurers in individual CIC market; Legal & General; Resolution; Norwich Union Life; Friends Provident
Brand Communication and Promotion: Key points; Adspend of life insurance accounts for 3% of all financial promotion; Critical illness adspend totals £1.46 million in 2006/07; Adspend on CIC exceeds income protection and MPPI; Prudential was the highest advertiser in 2006/07; Direct mail is favoured advertising channel
Channels to Market: Key points; Classification of distribution channels; Tied sales account for largest proportion of CIC new business; Direct sales increased by more than 30% in 2006; ABI distribution classifications; IFA sales account for 51% of the value of new ACCI policies; IFA sales account for 62% of the value of standalone CIC policies; 87% of pure protection contracts sold with advice; Purchasing distribution to assure future; Insurer/broker acquisitions in 2006/07:
The Consumer - Product Ownership: Key points; 6.7 million adults have critical illness cover; Ownership of protection products appears to be increasing; Product ownership highest amongst those aged 25-44; Growth for singletons?; A third of families with two earners have CIC; A fifth of ABC1s have critical illness cover; Considerable regional variation in ownership of CIC; Protection packages - the way forward?; Four in ten CIC policyholders have at least three protection products
The Consumer - Barriers to Purchase: Key points; Growth in CIC sector restricted by awareness and cost; Barriers categorised into key groups; 31% of non-policyholders lack awareness of CIC; Almost a fifth of those without children see no need for CIC; ABC1s less likely to see a need for CIC; Internet users are more likely to have alternatives to CIC; Cost causes people to turn to MPPI or to cancel their cover; 55% of people believe CIC is sold with too much pressure; Over-45s are the most concerned about the non-payment of claims; Too much pressure could erode trust; Is cost a smokescreen for a lack of understanding?; Some 80% who lack trust highlight non-payment of claims as an issue
Appendix - Barriers to Purchasing Critical Illness Cover: Figure 74: Agreement with statements concerning attitudes towards CIC, by gender, age, lifestage, age of children in household and marital status, November 2007; Figure 75: Agreement with statements concerning attitudes towards CIC, by socio-economic group, gross annual household income, working status and household tenure, November 2007; Figure 76: Agreement with statements concerning attitudes towards CIC, by newspaper readership, technology users, TV region and supermarket usage, November 2007
Appendix - Attitudes and Targeting Opportunities: Figure 77: Expectations of how long people could support themselves before falling into financial difficulty, if they or their partner fell ill, by gender, age, lifestage, age of children and marital status, November 2007; Figure 78: Expectations of how long people could support themselves before falling into financial difficulty, if they or their partner fell ill, by socio-economic group, gross annual household income, working status and household tenure, November 2007; Figure 79: Expectations of how long people could support themselves before falling into financial difficulty, if they or their partner fell ill, by newspaper readership, technology users, TV region and supermarket usage, November 2007; Figure 80: Expectations of how people would support themselves if they could not work due to ill health, by gender, age, lifestage, children in household and marital status, November 2007; Figure 81: Expectations of how people would support themselves if they could not work due to ill health, by socio-economic group, gross annual household income, working status and household tenure, November 2007; Figure 82: Expectations of how people would support themselves if they could not work due to ill health, by newspaper readership, technology users, TV region and supermarket usage, November 2007; Figure 83: Overview of responses to the question ‘There are many things which can happen to you in life - which of the following do you think are the MOST likely to happen to you at some stage in your future life?’, November 2007

Abstract

This report examines the key issues facing the critical illness industry today. It considers the current economic factors and the impact of industry and regulatory changes. The overall size of the critical illness market is assessed, while the report also identifies key players and innovation within the market. It also looks at the position of critical illness cover within the context of the wider protection market. Our consumer research highlights trends in ownership and barriers to purchase, as well as attitudes towards critical illness cover and also considers potential targeting opportunities for providers.

As this report examines the market for individual critical illness, regular-premium business provides the main focus for this report. Group critical illness is considered briefly within the Market Size and Companies and Products sections.

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Critical Illness Cover - UK

Table of Contents

Abstract