Individual protection product sales fell to 2.1 million in 2023, the lowest figure since 2018, according to the Association of British Insurers (ABI).
The drop of around 100,000 sales represented a 4.5% fall from the 2.2 million recorded in 2022, with term life assurance plans the biggest cause of the drop, particularly via the mortgage market.
The figures include data for term life assurance, critical illness, income protection (IP), whole of life, relevant life plans and business protection policies sold by ABI members.
However, there was a positive sign for the market as IP product sales hit a record high, leaping by 16% to 247,000 – the highest level since the trade body began collecting the data in 2000.
“Nearly all (97%) individual income protection products were sold with advice, highlighting the important role advisers have to play in increasing consumers’ financial resilience,” the ABI added.
Standalone critical illness sales also rose by 7%, although as a much smaller part of the market, to total 75,500 which was almost four times higher than 10 years ago.
The ABI did not include figures for the larger accelerated critical illness market for policies sold alongside term assurance policies.
Sales of all term life assurance products were at the lowest levels since 2017 with 1.5 million policies sold last year.
Non-mortgage related term assurance sales fell 8% in 2023, following stronger sales over the previous four years, but mortgage-related term sales fell 10% year-on-year with 449,000 policies sold.
Market expectations
The figures closely match those published by reinsurer Gen Re in February which also indicated a fall of around 100,000 sales in the individual protection market in 2023, with an uplift for IP.
Yvonne Braun, director of policy, long term savings, health and protection at the ABI, said: “Financial resilience – the ability to withstand a financial shock – is a hugely important issue.
“It’s encouraging to see that so many people recognise that income protection and critical illness insurance are an important part of financial planning and play a crucial role in providing a financial safety net.”
