Whole Life Insurance in the UK, Key Trends and Opportunities to 2017

Date: August 13, 2013
Pages: 69
Price:
US$ 2,795.00
License [?]:
Publisher: Timetric
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: W58066B28FAEN
Leaflet:

Download PDF Leaflet

Whole Life Insurance in the UK, Key Trends and Opportunities to 2017
SYNOPSIS
  • The report provides market analysis, information and insights into the UK whole life insurance business
  • The report provides a snapshot of market size and market segmentation
  • Comprehensive analysis of claims, market drivers and market outlook
  • Analysis of distribution channels for life insurance products in the UK
  • Deals, news and regulatory developments
  • Detailed analysis of competitive landscape and profitability for UK life insurers
SUMMARY

Gross written premiums in the UK’s whole life insurance category fell by 57% between 2007 and 2012, although gained momentum in 2010, and resumed growth at 8% in 2012. The market is dominated by unit-linked products, while the popularity of unitized-with-profits and guaranteed acceptance plans for the over 50s also improved between 2010 and 2012. Whole life insurance penetration represents 1.6% of the country’s GDP and has remained significantly below its pre-crisis levels. Whole life insurance density also fell sharply. Gradual economic recovery, increasing life expectancy and rising disposable income are expected to promote demand for whole life insurance products over the forecast period.

SCOPE
  • This report provides a comprehensive analysis of the whole life insurance market in the UK
  • It provides historical values for the UK’s whole life insurance market for the report’s 2008–2012 review period and forecast figures for the 2012–2017 forecast period
  • It offers estimates of new business premiums collected in the UK whole life insurance category
  • It analyses the key features of non-profit, unitized-with-profits and unit-linked whole life insurance products
  • It provides an overview of claims, market dynamics and market drivers
  • It discusses various distribution channels for life insurance products in the UK
  • It profiles top life insurance companies in the UK and outlines the key regulatory changes affecting them
REASONS TO BUY
  • Gain an understanding of UK whole life insurance market size
  • Explore the market dynamics across non-profit, unitized-with-profits and unit-linked whole life insurance segments
  • Learn about the performance of claims, market drivers and distribution channels
  • Understand the competitive landscape in terms of performance, profitability and product offerings
  • Find out more about key deals and recent developments in the market
KEY HIGHLIGHTS
  • The whole life insurance category declined dramatically but proved to be resilient. Meanwhile, growth in claims has been restricted.
  • Distribution channels are evolving in the post-RDR world.
  • Regulatory changes will bring further uncertainty.
  • Low interest rates continue to threaten investment returns and profitability.
  • Premium growth is expected to settle at 3.5% by 2017.
1 EXECUTIVE SUMMARY

2 INTRODUCTION

2.1 What is this Report About?
2.2 Definitions
2.3 Methodology

3 MARKET ANALYSIS

3.1 Market Size
  3.1.1 Penetration and density
  3.1.2 Non-profit whole life insurance
  3.1.3 UWP whole life insurance
  3.1.4 Unit-linked whole life insurance
3.2 Whole Life New Business Premiums
  3.2.1 UK whole life new regular and single premiums
  3.2.2 UK whole life new business, annual premium equivalent
  3.2.3 UK life and pensions new business premium by category
  3.2.4 Number of new whole life policies sold
3.3 Claims
3.4 Market Drivers
3.5 Market Outlook
3.6 Distribution Channels
  3.6.1 Distribution outlook

4 COMPETITIVE LANDSCAPE

4.1 Best Performers of 2012
4.2 Profitability
  4.2.1 Investment returns
  4.2.2 Profitability outlook
4.3 Whole Life Insurance – SWOT Analysis

5 PORTER’S FIVE FORCES ANALYSIS

5.1 Bargaining Power of Suppliers: Low to Medium
5.2 Bargaining Power of Buyers: Medium to High
5.3 Barriers to Entry: Medium
5.4 Intensity of Rivalry: High
5.5 Threat of Substitutes: Medium

6 DEALS

6.1 Royal London Acquires Co-op Life Insurance and Asset Management Arms
6.2 Lloyds Banking Group to Sell GBP450 Million Stake in St James’s Place

7 NEWS

7.1 Aviva Introduces Ongoing Adviser Charging on Investment Bonds
7.2 Standard Life Cuts With-Profits Bonus Rates
7.3 Scottish Life Enhances Investment Fund Range
7.4 Government’s Simple Product Suite to Include Whole-of-Life Cover
7.5 Axa UK Closes UK Bancassurance Arm

8 REGULATION AND COMPLIANCE

8.1 Recent Changes
  8.1.1 Risk selection by gender has been outlawed
  8.1.2 Policy statement 12/4: protecting with-profits policyholders
8.2 New Regulations for 2013
  8.2.1 Retail Distribution Review
  8.2.2 Solvency II

9 MACROECONOMIC BACKDROP

9.1 Real GDP Growth
9.2 Interest Rates
9.3 Demographics

10 COMPANY PROFILES

10.1 Aviva Plc – Company Overview
  10.1.1 Aviva Plc – key facts
  10.1.2 Aviva Plc – main products
  10.1.3 Aviva Plc – main competitors
  10.1.4 Aviva Plc – key employees
10.2 Canada Life – Company Overview
  10.2.1 Canada Life – key facts
  10.2.2 Canada Life – main products
  10.2.3 Canada Life Plc – main competitors
  10.2.4 Canada Life Plc – key employees
10.3 Friends Life Group Plc – Company Overview
  10.3.1 Friends Life Group Plc – key facts
  10.3.2 Friends Life Group Plc – main products
  10.3.3 Friends Life Group Plc – main competitors
  10.3.4 Friends Life Group Plc – key employees
10.4 Legal & General Group - Company Overview
  10.4.1 Legal & General Group – key facts
  10.4.2 Legal & General Group – main products
  10.4.3 Legal & General Group – main competitors
  10.4.4 Legal & General Group – key employees
10.5 Lloyds Banking Group – Company Overview
  10.5.1 Lloyds Banking Group – key facts
  10.5.2 Lloyds Banking Group – main products
  10.5.3 Lloyds Banking Group – main competitors
  10.5.4 Lloyds Banking Group – key employees
10.6 Old Mutual Plc – Company Overview
  10.6.1 Old Mutual Plc – key facts
  10.6.2 Old Mutual Plc – main products
  10.6.3 Old Mutual Plc – main competitors
  10.6.4 Old Mutual Plc – key employees
10.7 Prudential Plc – Company Overview
  10.7.1 Prudential Plc – key facts
  10.7.2 Prudential Plc – main products
  10.7.3 Prudential Plc – main competitors
  10.7.4 Prudential Plc – key employees
10.8 Royal London Group – Company Overview
  10.8.1 Royal London Group – key facts
  10.8.2 Royal London Group – main products
  10.8.3 Royal London Group – main competitors
  10.8.4 Royal London Group – key employees
10.9 St. James’s Place UK Plc – Company Overview
  10.9.1 St James’s Place UK Plc – key facts
  10.9.2 St James’s Place UK Plc – main products
  10.9.3 St. James’s Place UK Plc – main competitors
  10.9.4 St. James’s Place UK Plc – key employees
10.10 Zurich Financial Services Ltd – Company Overview
  10.10.1 Zurich Financial Services Ltd – key facts
  10.10.2 Zurich Financial Services Ltd – main products
  10.10.3 Zurich Financial Services Ltd – main competitors
  10.10.4 Zurich Financial Services Ltd – key employees

11 STATISTICS

11.1 Review Period
11.2 Forecast Period

12 APPENDIX

12.1 Methodology
12.2 Contact Us
12.3 About Timetric
12.4 Disclaimer

LIST OF FIGURES

Figure 1: Gross Written Premiums for UK Whole Life Insurance (GBP Million), 2008–2012
Figure 2: UK Whole Life Insurance – Penetration Rate and Density, 2008–2012
Figure 3: Non-Profit Whole Life Gross Written Premiums (GBP Million), 2008–2012
Figure 4: UWP Whole Life Gross Written Premiums (GBP Million), 2008–2012
Figure 5: Unit-Linked Whole Life Gross Written Premiums (GBP Million), 2008–2012
Figure 6: New Business Premiums for UK Whole Life Insurance (GBP Million), 2008–2012
Figure 7: UK Whole Life New Regular and Single Premiums (GBP Million), 2008–2012
Figure 8: UK Whole Life New Business, Annual Premium Equivalent (GBP Million), 2008–2012
Figure 9: UK Life and Pensions New Business Premium by Category (GBP Million), 2008–2012
Figure 10: UK Whole Life Insurance – Number of New Policies Sold (Thousands), 2008–2012
Figure 11: UK Life Insurance – Claims Incurred (Annual Change), 2008–2012
Figure 12: Gross Written Premiums for UK Whole Life Insurance (GBP Million), 2013–2017
Figure 13: Whole Life Insurance Growth Dynamics by Product (%), 2008–2017
Figure 14: Commissions Paid by Life Insurers in the UK (GBP Million), 2008–2012
Figure 15: Market Shares of the 10 Leading UK Life Insurers (%), 2012
Figure 16: Combined Operating Ratio for Total UK Life Insurance Business (%), 2008-2012
Figure 17: Loss and Expenses Ratio for Total UK Life Insurance Business (%), 2008–2012
Figure 18: UK Life Insurance – Five Forces Analysis
Figure 19: The UK’s Insurance Regulatory Framework
Figure 20: Real GDP Growth (%), 2008–2017
Figure 21: Growing and Aging Population, 1995–2012
Figure 22: UK Population Aged Over 65 (%), 1995–2017
Figure 23: UK Overall Life Expectancy (Years), 1995–2017
Figure 24: Improving Living Standards in the UK (GBP Thousand), 1997–2011

COMPANIES MENTIONED

Aviva Plc
Canada Life
Friends Life Group Plc
Legal & General Group
Lloyds Banking Group
Old Mutual Plc
Prudential Plc
Royal London Group
St. James’s Place UK Plc
Zurich Financial Services Ltd

Gross written premiums in the UK’s whole life insurance category fell by 57% between 2007 and 2012, although gained momentum in 2010, and resumed growth at 8% in 2012. The market is dominated by unit-linked products, while the popularity of unitized-with-profits and guaranteed acceptance plans for the over 50s also improved 2010 and 2012. Whole life insurance penetration represents 1.6% of the country’s GDP, and has remained significantly below its pre-crisis levels. Whole life insurance density also fell sharply, totaling a value of GBP384.1 in 2012.

Gradual economic recovery, increasing life expectancy and rising disposable income are expected to promote the demand for whole life insurance products over the next few years. Continued macroeconomic uncertainty is likely to constrain growth in the category and life insurers will face competition from the banking and wealth management sector offering savings and investment alternatives. A strong return to growth is not expected, with premiums only expected to grow at a CAGR of 3.5% between 2013 and 2017. Adverse factors such as prolonged low interest rates and regulatory changes will also affect new business volumes in the segment.

Growth in claims has been restricted

While the recession led to a surge in claims in the non-life segment, claims in the non-life segment, claims in the life insurance segment fell sharply in 2009, declining by 36%. Nevertheless, in line with an increase in policy surrender rates, life claims consistently exceeded premiums over the last few years, resulting in high loss ratios across the segment.

Distribution channels are evolving

Insurance brokers are the main channel for distribution of life insurance products in the UK. However, independent financial advisers (IFAs) are expected to face increased pressure since the Retail Distribution Review (RDR) was introduced. RDR implies that advisors can no longer take commission on sales of retail investment products, including life insurance policies, and instead, will have to charge their clients directly. The role of low-cost channels in securing new business will grow significantly over the next few years, with e-commerce and direct marketing expected to further dominate the distribution of guaranteed acceptance plans.

Low interest rates continue to threaten investment returns and profitability

The operating environment for UK life insurers has remained challenging. The decline in equity and property markets severely affected the profitability of the life insurance segment. Although capital positions of UK life insurers have remained solid, low interest rates are likely to further depress the industry’s earnings, resulting in reduced new business margins and an increased focus of the companies on maximizing cash flows in their back book of business.

The material was prepared in August, 2013.

LIST OF TABLES

Table 1: Insurance Industry Definitions
Table 2: UK Whole Life Insurance – SWOT Analysis
Table 4: Aviva Plc, Key Facts
Table 5: Aviva Plc, Main Products
Table 6: Aviva Plc, Key Employees
Table 7: Canada Life Plc, Key Facts
Table 8: Canada Life Plc, Main Products
Table 9: Canada Life Plc, Key Employees
Table 10: Friends Life Group Plc, Key Facts
Table 11: Friends Life Group Plc, Main Products
Table 12: Friends Life Group Plc, Key Employees
Table 13: Legal & General Group, Key Facts
Table 14: Legal & General Group, Main Products
Table 15: Legal & General Group, Key Employees
Table 16: Lloyds Banking Group, Key Facts
Table 17: Lloyds Banking Group, Main Products
Table 18: Lloyds Banking Group, Key Employees
Table 19: Old Mutual Plc, Key Facts
Table 20: Old Mutual Plc, Main Products
Table 21: Old Mutual Plc, Key Employees
Table 22: Prudential Plc, Key Facts
Table 23: Prudential Plc, Main Products
Table 24: Prudential Plc, Key Employees
Table 25: Royal London Group, Key Facts
Table 26: Royal London Group, Main Products
Table 27: Royal London Group, Key Employees
Table 28: St James’s Place UK Plc, Key Facts
Table 29: St. James’s Place UK Plc, Main Products
Table 30: St. James’s Place UK Plc, Key Employees
Table 31: Zurich Financial Services Ltd, Key Facts
Table 32: Zurich Financial Services Ltd, Main Products
Table 33: Zurich Financial Services Ltd, Key Employees
Table 34: Whole Life Insurance (GBP Thousand), 2008–2012
Table 35: Whole Life Insurance (GBP Thousand), 2013–2017

Ask Your Question

Whole Life Insurance in the UK, Key Trends and Opportunities to 2017
Company name*:
Contact person*:
Phone/fax*:
Email*:
Request invoice
Your enquiry: