After more than doubling between 1998 and 2003, 2004 saw a 17.3 per cent fall in sales of new term assurance (TA) policies, and sales of new individual critical illness (CI), and individual income protection (IP) also fell by 30.9 per cent and 25 per cent respectively.
Mortgage-related sales outperformed non-mortgage business. Nevertheless, these also declined with TA down 13.5 per cent compared to a 21.3 per cent fall in non-mortgage sales. Mortgage-related CI fell 18.7 per cent compared to a 46 per cent drop in non-mortgage CI sales.
Despite the slightly gloomy review of new life sales in 2004, the report was optimistic about the steps that could be taken across the industry to improve sales and reduce the growing protection gap faced by consumers.
These included the introduction, from 6 April 2006, of pensions taxation simplification which will permit tax relief on term assurance policies and may offer a cost-effective alternative to traditional term products.
Mark Johnson, head of UK marketing at Swiss Re’s Life & Health Business Group, said: “These figures show action is urgently needed to simplify products, particularly income protection.
“At the same time, intermediaries need to broaden their client base rather than simply replacing existing business. We have to wake up to the fact that protection does not sell itself.”
Tony Corrigan, managing director of Manchester-based Classic Network Solutions, commented: “In the mortgage broker market we have changed from salespeople to order takers.
“We have a duty of care to provide for our clients at all times. Therefore the art of selling needs to be rekindled.”
