Protection new business dipped slightly in 2022 to £760m from £767m in 2021 on an annual premium equivalent (APE) basis, according to figures from Gen Re.
Given the uncertain landscape over the year with Covid variants, the uncertain political and economic backdrop and inflationary pressures, Gen Re said the protection market “enjoyed a relatively successful year in 2022”.
Data from the reinsurer’s Protection Pulse, which gathers new business sales from all the major writers of insurance in the UK market, showed sales in life insurance products fell most substantially in premium value, but income protection (IP) business surged.
Gen Re noted the “highlight of the year” was IP, which saw new business rise by £14m or 21% to £80m, up from £60m in 2021.
“This has well and truly recovered from the brief downturn in 2020 and we are pleased to report another very successful year of growth in premiums,” the reinsurer said.
“The market grew by 21% in premiums written since 2021, and comfortably surpassed the high of £69m in 2019.
“The renewed interest in IP follows the ending of the UK government-backed furlough scheme, which highlighted the value of this type of protection to consumers,” it added.
Term assurance sales fell by £8m or 2.3% to £353m during the year, with most of this fall felt in the first six months of the year as the market recovered in the second half.
Critical Illness (CI) market premiums remained relatively stable in 2022, dipping from a combined £257m to £255m, although the ratio of standalone CI premiums compared to accelerated CI premiums continues to grow, Gen Re noted.
Accelerated critical illness plan sales dropped by £7m or 2.8% to £226m, while standalone CI plans rose by £5m or 18.6% to £29m.
Guaranteed acceptance whole of life (WOL) policies suffered the largest fall of £14m and 27.3% to £38m, while underwritten whole of life plans increased sales by £3m or 8.9% to £34m.
“The guaranteed WOL market continues to contract, and has done so sharply in 2022,” Gen Re said.
“We have seen a few players pull out of the guaranteed WOL market in recent years and the increased cost of living, particularly affecting the lower socioeconomic segments, may also be contributing to reduced sales.”
It concluded by noting that the ongoing cost of living crisis is likely to impact consumer spending habits in the short to medium term, and could impact protection new business sales going forward.