2021 started with lockdown in the country and, like 2020, it once again brought great uncertainty to individuals and businesses alike, in terms of what challenges the then current wave of COVID-19 would bring, how best to deal with these, and for how long they would persist. Tempering this uncertainty was the start of the vaccine rollout and promising results in vaccine trials.
Despite the initial uncertainty in 2021, the Protection industry appears to have bounced back well and we are pleased to report that total annual premium equivalent (APE) for 2021 has grown by 7% on the previous year. Total APE for 2021 in the Gen Re Protection Pulse survey was just shy of £770 million compared to £717 million reported for 2020. The excellent 2021 figures have brought the market just 1.5% short of 2019’s record-breaking sales figures.
The success of 2021 can be largely attributed to the increase in the Term Assurance market, driven predominately by a buoyant property market. According to the UK government’s national statistics1, more homes were sold in H2 2021 than in any other period reported since 2007.
2021 brought continued growth to Term Assurance sales: this grew by 8.4% compared to 2020 and 2019, with total APE reaching a record-breaking £361 million for the year.
We also saw significant growth in Income Protection, with an increase of 12% compared to 2020 and falling about 4% short of 2019’s figures. Critical Illness (CI) grew by 6% over the last year – this product’s sales were particularly hurt by the effects of the COVID-19 pandemic in 2020 and there is still some way to go for CI to get back to 2019 pre-pandemic sales levels.
There were contrasting fortunes for the two Whole of Life products. The underwritten Whole of Life market achieved a growth of almost 25% in APE compared to 2020, although it is still lower than 2019. In contrast, there was a 10.5% decline for the Whole of Life Guaranteed market in APE sales compared to the previous year. This was the only product line that declined in sales from 2020 into 2021 and probably reflects the uncertainty of product providers in 2020 and 2021 about the outlook for a product with guaranteed acceptance.
The recovery in the Protection industry has been positive, and these figures reinforce the value that consumers place in having Protection policies. However, new challenges await the industry as the cost of living increases in the UK are likely to have an impact on new Protection sales. We will continue to monitor the impact of this as 2022 progresses.
1 https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above (Last access 20.04.2022)
| Read more on previous results |
