Over 60% of respondents to the Life Insurance International 2015 outlook survey expect life insurance sales to rise over the next year – with term life assurance likely to the most popular protection product.
A lack of customer awareness about life insurance, however, was cited by 56.25% of respondents as the greatest threat to their businesses.
Go deeper with GlobalData
It is encouraging that senior executives expect life sales to rise, but as Kevin Carr, chief executive of Protection Review in the UK, notes: "Surely, in order for sales to rise the industry must do more to address consumer awareness."
On the outlook for the next year, 50% said they expect life sales to increase somewhat. In second place, 31.25% of respondents expect sales to remain the same and 12.5% think they will increase substantially.
Ron Wheatcroft, technical manager at Swiss Re, says: "New individual life assurance sales dropped in 2013. This was partly a consequence of the switch to gender-neutral pricing in late 2012 which saw some business completed in 2012 to take advantage of gender-specific prices.
"The 2014 results were a modest improvement on 2013, and I would expect this to be repeated in 2015 across both individual and group risk product lines."
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataWheatcroft adds: "On the retail protection side, term assurance policies have always been the biggest seller. That will continue.
"I would hope that more income protection policies would be sold, since only 10% of the working population has any cover at all on an insured basis. Currently, new IP sales stand at only around 25% of new whole life and critical illness policies."
Positive sentiment
Deepak Jobanputra, deputy CEO at Vitality Life, welcomes the positive sentiment among survey respondents, but questions what will drive the increase in life sales.
"Insurance needs to modernise to remain relevant in the consumer’s mind. This requires a number of components: awareness, value and convenience," says Jobanputra.
Steve Jenkins, director of financial markets at the Chartered Insurance Institute, says the fact that over half of respondents to the survey noted the lack of customer awareness highlights the need for the market to invest in the knowledge of its people to promote protection.
Jenkins says: "Whether these are life insurance agents or people working in call centres, we should be able to help and guide the customer."
Overall, 37.5% of executives believe brokers or agents will drive consumer engagement with life insurance over the next 12 months. In joint second place are direct marketing and mobile phones and tablets, at 18.75% each.
Jenkins says this highlights that brokers and agents should be selling expertise and advice, rather than the product itself.
Richard Sadler, head of proposition development for retail protection at Zurich, says that although brokers and agents are the dominant channel for life sales, mobiles and tablets are growing as a customer engagement channel and "at some point" will become the dominant channel for consumer engagement.
Technological change
According to Ian McKenna, director of London-based Finance & Technology Research Centre, the fact that only 6.25% of respondents said the speed of technological change poses the greatest threat to their business "speaks volumes in itself".
McKenna says: "Consumer behaviour is evolving rapidly and people are embedding mobile phone and tablet technology in every aspect of their lives. However, the [life] industry is dominated by baby boomers at a time when their core audience has moved on."
According to McKenna, only a small number of life insurers will embrace technological change and leverage it. He says: "I think a significant number of life offices will fall by the wayside.
