Canada Life has closed its individual protection business to new applications immediately.
In a statement this morning, the insurer said its decision to leave the UK individual protection market was taken following a review of the business and to focus on other areas where it could achieve market scale.
Advisers called the move “disheartening” and “disappointing” and praised the insurer’s treatment of vapers but said that was not enough to differentiate its offering.
Canada Life products affected sit within its fixed term cover range and include life insurance and life insurance plus critical illness.
The insurer added it will continue to support customers, honouring existing contractual obligations, and pay claims in line with its usual processes. It is entering a period of consultation with affected employees.
A spokesperson for the company told Health & Protection said 12 staff have now been placed at risk.
The spokesperson added that while these roles are now subject to individual consultations, affected staff will be offered all the support the company can offer them during this time.
The spokesperson said the company recognised it needed to create scale in the individual onshore market and with that came challenges, including investment in IT and proposition development.
And Canada Life said it needed to make priority calls on where best to utilise resource and concluded the individual onshore protection market was not a core priority for the company.
But the insurer said it remained committed to its group protection business, its lifetime wealth business which includes other areas of insurance including home finance, annuities and international offshore protection.
According to the spokesperson, the move is not a reaction to the cost of living crisis or any other external factor.
Tim Stoves, managing director, protection at Canada Life said: “I’m proud of what we have achieved since 2016 in the individual protection market, but it has become clear we need to make priority calls on where best to utilise our resource as we continue to focus on our core areas of growth.
“Our exit from the onshore individual market allows us to refocus on other areas of our business, including group protection and the international (offshore) protection market.”
‘Disheartening’ and ‘disappointing’
Phil Jeynes, director of corporate strategy at Reassured, said: “In a market which has lost many high profile brands over recent years, it is disheartening to hear this news.
“It highlights the difficulty in making headway in a sector dominated by established, successful firms without a discernible USP.
“Differentiated treatment of vaping customers simply wasn’t enough for Canada Life, despite no shortage of effort from a team of impressive, experienced individuals.”
Alan Lakey, director at CI Expert, also called today’s news “disappointing.”
“Canada Life individual protection was truly innovative in that it offered discounts to vapers when the market view has been to treat them as smokers,” Lakey added.
“This approach provided a vital, albeit not widely known, facility for those who have forsaken cigarettes.
“Hopefully this is not a harbinger of things to come over the next few years.
“During the past decade we have lost numerous insurers – Old Mutual, Bright Grey, Scottish Provident, Bupa, Friends Life, Friends Provident and Axa. The market has been steadily shrinking since 1990 and this has been bad news for consumers and advisers alike.”