ABI data on policies in force shows the number of individual income protection policies has increased for the first time since 2007.
This data shows that in 2015, there were 1.15m individual income protection policies in force, a 2% increase compared to 1.13m in 2014.
This new data also revealed growth in the group income protection market with the number of people covered by their employer increasing by 3% on the previous year.
Raising awareness
The ABI said the market growth is likely to be down to the industry raising awareness and improving understanding of income protection, including the ABI’s work with the Money Advice Service and the 7 Families campaign.
Raluca Boroianu-Omura, head of protection and health at the ABI, stressed the importance of income protection, saying every year, 1 million workers find that they are unable to work due to ill health, and income protection can act as an essential safety net by paying a replacement income, but also helping people back into the workplace earlier with rehabilitation services.
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By GlobalDataBoroianu-Omura said: “This new data is encouraging, but there is work to be done to improve the take up of income protection so more people can benefit.”
Commenting on the ABI's group income protection figures, Paul Avis, marketing director at Canada Life Group Insurance, told Life Insurance International there is still a massive amount of work to do as in his view there is a lack of industry alignment on how to grow the group protection market. He also called for more awareness on low benefit level and the difficulty of obtaining state benefits.
Jennifer Gilchrist, senior product development manager at Royal London, said the 7 Families campaign has highlighted to advisers the importance of income protection.
"It is encouraging to see that growth is going in the right direction. We [Royal London] are of the opinion that income protection is the cornerstone of all protection needs for people who are working."
Gilchrist said a challenge for income protection is that it is perceived to be complex and expensive.
She said: "At Royal London we are looking at how to make the product more engaging and easier to access for customer and adviser."
