Peter Bayliss, Product Director for Synaptic Software, discusses if this is the case and what it means for the industry.
Currently, the sale of income protection policies sold to individuals are seeing a marked increase for the first time since 2007.
This, it can be argued, is in part due to the Association of British Insurers (ABI) wanting to publish more ‘meaningful' claims data plus that we have new leadership at the helm of the Income Protection Task Force.
The Synaptic protection portal Webline has experienced a 26 per cent increase in all protection quotes handled so far in 2017 compared to the same time last year.
So, why the rise in popularity for IP? There are many reasons:
The increase in mortgages and buoyancy in the re-mortgage market;
High levels of press coverage leading to more education around protecting your income;
Tangible benefits such as rehabilitation services and case management contributing to the customer experience.
In 2016, the ABI reported an increase in IP sales of just under 10 per cent.
During the same period, Webline increased its IP quotes by 46 per cent. In Q1 this year, we saw growth with a 40 per cent increase in IP quotes over the same period in 2016.
As Q2 now closes, we continue to see a rise in illustrations by way of a 17 per cent increase compared to the same quarter last year. This is great news for IP.
Consumers are now being exposed to more quality conversations on how to protect their income in the event of being unable to work due to long term illness or injuries from an accident.
Plus, as our lifestyles continue to evolve and we spend more money on mobile phone-related costs, on eating out and on weekend breaks and holidays, on staying in hotels, there are a lot of outgoings we need to protect.
The industry will continue to see a significant increase in IP policies going forward into the second half of the year as more people are covered than ever before. IP as a product will continue to grow in popularity. This is due to a number of reasons.
The chances of us being unable to work due to illness or accident are still statistically greater than dying before retirement. But there are other aspects of protecting one's income that should not be ignored.
As with Executive and Group IP arrangements, should more time be invested pondering the need to protect an individual's own personal pension contributions by way of an individual income protection plan?
Executive IP and Group plans do, surely Individual IP could boost its profile by protecting such an important expense a lot of us have.
Current income replacement ratios can be generous and allow for the everyday living expenses to be covered, but in the event of a successful claim, personal pension contributions could be easily overlooked in favour of perhaps less important lifestyle needs.
What about Group and Executive IP plans? Employers will be acutely aware of the early intervention and rehabilitation services provided by so many insurer's Group IP plans, but what about the 76 per cent of small businesses in 2016 who didn't employ anyone other than the owner?
Executive IP will benefit many of them. The digital space is a prime candidate to help simplify the customer experience for all types of IP.
Synaptic is well-positioned to launch our partners' new IP products quickly and effectively.
This agility allows us to seek new and alternative ways to get IP enhancements to the market and the immediacy in which we can access quotation activity against the more traditional ways of understanding market performance at six-monthly intervals means we can gather insight and use this to meet our partners' and the consumers' needs.
We consistently handle significant requests each month contributing to over 20 per cent of all protection sold in the UK and that includes an incremental increase in Term and Critical Illness as well.
With constant open and collaborative relationships with our provider and distributor partners, we are proud to say that we have been instrumental in contributing to the recent growth across