An ageing population, medical advances and market innovation mean the growth potential for the global critical illness (CI) market is considerable – but the challenge will be to encourage consumers to view CI as an urgent priority.
That is the key message to emerge from research conducted by Life Insurance International.
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Maria Koutsoukos-Larda, MetLife EMEA head of protection products, says there are two interesting trends in today’s products. "The first trend is scaling of benefits depending on the severity of the condition addressing the issue of earlier designs which failed to pay any benefits in less critical conditions.
"Additionally, advances in medical science which have increased the survival rates of patients, have given rise to products that pay upon second or subsequent diagnosis of related diseases like cancer or heart attack and stroke."
Picking up on Koutsoukos-Larda’s first point, Deepak Jobanputra, Deputy CEO, VitalityLife, says the critical and serious illness market has seen tremendous change over recent years with the acceptance and universal adoption of severity based cover.
Jobanputra explains that benefits are paid out in line with the severity of impact on customers from serious conditions. This ensures that customers receive benefits at an earlier stage than traditional critical illness policies.
In terms of the challenges facing the critical illness market, Koutsoukos-Larda, says future medical advances pose a threat for insurers due to continuously rising incidence rates as many serious diseases are now caught at early stages with the possibility for recurrence.
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By GlobalDataKoutsoukos-Larda adds: "Another challenge insurers face is the ability to increase the consumer purchasing priority of critical illness. This can be achieved primarily by combining critical illness with the primary products consumers buy like savings, death or disability cover."
Fairly flat sales
Kevin Carr, chief executive of Protection Review in the UK, also points out that while some insurers are using advertising heavily to promote CI, sales however "are fairly flat" at around 400,000-500,000 policies a year and in some cases continue to fall.
Looking ahead, Robert Morrison’s view, who is chief underwriter for Aviva UK&I Life, says the insurer remains convinced that there will continue to be a strong need for critical illness products in the future.
He says: "For the reasons mentioned earlier, careful consideration needs to be given to what will provide the most valuable cover in the areas where it’s needed most. People are living longer and survival rates following the diagnosis of a critical illness are continuing to increase."
You can read the full analysis and outlook for the global critical illness market in the February of Life Insurance International, which will be available soon.
