The remaining insurers operating in the UK individual protection market have reassured the Protection Distributors Group (PDG) they are “here to stay“.
The news is likey to be welcomed by intermediaries as protection sector has been beset by a number of high profile insurer exits, mergers and acquisitions in recent years.
This has led to some frustration among advisers and has formed a critical plank in the Financial Conduct Authority’s ongoing pure protection market review.
The past few years have proven turbulent for the sector in terms of mergers and acquisition activity.
In February 2022, Royal London ended merger talks with LV= in the wake of Bain Capital’s failure to acquire LV=.
In November 2022, Canada Life exited the individual protection market.
In April of 2023, Aegon revealed it was exiting the market as Royal London acquired its individual protection book.
A year later Aviva completed its acquisition of AIG Life UK, while just last year, Chesnara revealed it was acquiring HSBC Life in a £260m deal.
However, advisers have now received reassurance that the remaining providers are committed to continuing operating in the sector.
Speaking to Health & Protection for our analysis on the life insurance sector, PDG board member Roy McLoughlin (pictured), explained the situation.
“We have been reassured by the remaining insurers that they are all here to stay and that is most welcome news as the requirement for protection will always be increasing for a whole host of reasons,“ McLoughlin said.
“But central to this is an ageing workforce of course – plus mortgages are being taken out at a much later age than 20 years ago.
“We encourage development of more products and innovation by existing insurers, but would welcome new additions to the market so that consumer choice can be widespread.”
Alan Lakey, director of CIExpert and Highclere Financial Services, went further – maintaining new entrants to the market were not only welcome but essential for the continuance of choice and the fresh thinking that galvanises innovation.
“A buoyant competitive market is also essential for the health of the advisory market,” Lakey says.
“We don’t want a small Australian-model where advisers are not central to the selection process.
“Unfortunately, recent history highlights how each new entrant is balanced by an existing provider exiting due to a failure to gain sufficient traction.”
