We are helping to protect lives and livelihoods in the UK through providing our easy-to-use comparison service.
Insurers pay out £14.5 million every day for protection policies, including income protection, critical illness and life insurance in the UK1. Whilst we wait for the latest reports for year in review for 2019 to appear in the first quarter in 2020, we are thinking about how to help the UK protection industry create better outcomes every day for those who are in the unfortunate position of having to make a claim.
In 2019, awareness of mental health and its impact has been increasing, and health and wellbeing at work has been constantly in the headlines. The ABI claims that almost 13% of sickness absence days in the UK can be attributed to mental health conditions and stress is believed to be one of the leading causes of employee absence3.
Income protection sales have been increasing throughout the last couple of years. According to ONS data, in 10 years, from 2003 to 2013, the yearly expenditure breakdown on life insurance by household has increased from £362 to £435 – an increase of 17%. During the same period, the same trend continues with average spend on income protection increasing from £485 to £556 – a total of 13%.
However, when looking at the numbers for all life insurance as a group, we can observe a drop of 37%3. Interestingly, households in the South East and South West spend on average over £600 a year on 'whole of life' whereas the equivalent for London is £361 and the whole of the UK is £435. This is likely to be explained by the clustering of highest income earners around these areas.
Sum assured amounts vary considerably. According to Synaptic data, the most popular advised income protection sum assured is between:
£751 to £1,000 per month (18%)
followed closely by
£1,251 - £1,500 (12%),
£1,751 to £2,000 (10%) and
£2,251 to £2,500 (10%).
The biggest sum assured cluster at 8% of cases, have a sum assured of £4,751 or more – again, likely to be residents in the South East or South West of England.
The average UK household has savings to cover 3 months should the head of the household lose their job. Synaptic data shows that intermediaries most often recommend a 13-week deferred period with 26 weeks being the second most popular choice followed by a 4-week deferred period. However, the comparison is based on retail advice so it would be expected that the deferred periods would be longer for people who seek financial advice.
The top three features for income protection products in 2019 were;
- Guaranteed premium
- Personal income protection
- Own occupation definition
'Counselling service included' was 17th most popular and 'helpline' was the 19th most popular. When comparing the most popular features in the 2018 data, 'counselling service' has stayed at 17th place on the list, but increased as a choice by 0.8% of advisers, with 'helpline' actually decreasing as a choice.
In 2019 the industry has seen value-add services bolt-ons increasing and more and more providers are bringing in more tangible support services before a claim is triggered. These services benefit both the consumer by offering more support before catastrophic consequences, and the ecosystem by reducing the amount paid out every day as well as increasing the demand for insurance products. The products of 2020 are likely to fulfil more than regulatory needs and really focus on how the additional benefits of these products can be made easy to understand (as well as advise on).
A year in progress – supporting your sales process
Throughout the year, we have focused on improving the Webline user experience. The changes include new design for both standalone and multi-benefit journeys through the Webline portal, which has significantly improved the time to compare policies.
The results page has seen many improvements for displaying income protection stepped benefit results. We also clarified the results pages with new icons to confirm if a provider has responded to a joint life quote on a Joint or Dual life basis. All design elements have been reviewed and renamed to ensure we give maximum clarity for the user.
Income protection results has also seen the addition of filters which allows easy comparison on long and short-term Income Protection.
Significant changes have also been made behind the scenes. These improvements now enable Synaptic to be more agile when making enhancements and adding new providers and products to the service. In addition, they have enabled weekly release cycles to better align to the rest of the ecosystem and provide faster updates to the market.
We have also added tens of new products as well as rental protection, and are currently working on adding other product lines to the service.
Not just protection – annuities (including enhanced annuities also)
Webline's annuity comparison service is fully PS19/1 FCA compliant and offers a comparison service through the portal or through web services which can be tailored to meet your pre-sales, information prompts or wake up packs' workflow.
We're staying committed to holistic and independent due diligence – and focusing on creating better outcomes by providing the tools to the advice market to provide suitable recommendations on protection. We are focusing on helping advisers extend their reach, protecting more lives and livelihoods and raising the awareness of mental health.
The year in review, could be summed up for its positive dialogue of mental health awareness as we start to see more and more features and value add services being available in product propositions to address the often-unseen consequences of unhealthy mental health. Webline is facilitating easy sales process for any size of organisation in order to protect more lives and livelihoods.
This Webline screen shows an income protection quote. Adjusting the parameters of the research is easy to explore options. The 'Apply' button allows the recommendation to be converted into an order (with pre-population of the form), taking you directly into the provider's extranet to complete the case.
Find out how our holistic approach can promote protection sales by exploring our comparison services, visit www.synaptic.co.uk.