Scottish Widows doubled its protection new business income last year and has set an ambition to become the third largest protection provider in the UK by 2025 as it targets the intermediary market.
However, it also unveiled plans to launch a digital-first proposition which will include protection and advice, targeting “mass affluent” people with income or wealth above £75,000.
The provider, which is part of Lloyds Banking Group (LBG), completed £32m worth of protection new business in 2021, up from £16m in 2020.
It’s existing protection business dipped slightly to £20m from £21m – giving it a £52m total protection business during 2021, up 47% from the previous year.
As part of its annual report, the banking group said it claimed at 5% share of the intermediary protection market in 2021 – up from 4% in 2020.
However, the insurer has ambitions to significantly increase this over the next three years.
“In insurance, we will strengthen our intermediary offering to capture market share as we aim to become a top three protection provider by 2025,” it said.
According to last year’s Swiss Re Term Watch, in 2020 Scottish Widows did not break into the top five insurers for sales of new term life, critical illness or income protection products.
Broaden intermediary propositions
The move is part of a wider aim to broaden LBG’s intermediary propositions.
“Intermediaries constitute a significant proportion of the market for certain key products, representing around 40% of our total consumer income,” the bank said.
“While we have a leading proposition and market share in mortgages, there are opportunities to significantly leverage our scale to grow in under-represented intermediary products such as motor finance, home insurance, protection, individual pensions and investments.
“By making it easier for intermediaries to do business with us, the group can deliver high quality products and services to all customer segments via reliable, low-friction, intermediated customer journeys.
“We will look to emulate our success in workplace pensions where we have grown market share from 10% to 19% since 2017,” it added.
Digital-first mass affluent proposition
The banking group also revealed that it will be creating a digital-first offering for the “mass affluent” population which it said was “an attractive and currently under-served segment”.
“We intend to focus on the broader pool of mass affluent customers with income or wealth above £75,000, with a scale digital wealth offering and integrated banking solution,” it said.
“We will combine a tailored banking proposition with investments, protection and advice, leveraging our current leading capabilities and the Embark platform.”
LBG said it saw a clear gap in the market for a digital-first, integrated offering which combined a full set of banking, insurance and investment products, and said it had the largest mass-affluent customer base in the UK of more than two million customers.
“This requires being able to support customers in the accumulation and decumulation stage of their lives by joining-up services across banking, housing, pensions and investments,” it added.
Profits up by £4.5bn
Overall, the banking group reported a significant boost to its profitability, with a £6.9bn pre-tax profit, up from £1.2bn in 2020 and a £5.9bn post-tax profit, up from £1.4bn.
Group chief executive Charlie Nunn said 2021 had been a year of solid financial performance for the business.
“We will look to deepen relationships with our existing customers, both consumers and businesses of all sizes, and meet more of their financial needs by making our great products more relevant to them and our channels simpler and more personalised to use,” he said.
“This will set the group on a higher growth trajectory with more diversified revenue streams, while we retain our strong focus on cost and capital discipline.
“Enabled by maximising the potential of our dedicated people, technology and data capabilities, our strategy represents an exciting new chapter for Lloyds Banking Group.”