Income protection sales increased by 10.7% during 2015 according to Swiss Re's Term and Health Watch 2016.
The report also showed that bancassurance sales declined, impacting new sales overall. However, the report said that it has been an "encouraging year" for direct to consumer propositions.
The key findings are:
• New direct to consumer term assurance sales, including policies with critical illness riders, rose from 36,586 in 2014 to 115,633.
• New bancassurance term assurance sales fell from 234,278 new policies in 2014 to 122,250
• New term only policy sales increased by 2.4% while term with critical illness sales decreased by 9.7%. This results in a decline in total new term assurance sales for 2015 of 1.8%.
• New decreasing term assurance sales, with and without CI, fell by 10.5% from 471,044 in 2014 to 421,756
• New income protection sales grew by 10.7%.
• New guaranteed acceptance whole life sales increased by 7.4% from 243,181 in 2014 to 261,137
• New underwritten whole life sales increased by 6.9% from 30,810 in 2014 to 32,937.
Maxine Udall, marketing and research manager at Swiss Re and author of the report, said: "It's great to see new sales of pure term life, income protection and whole life cover increasing. The fall in new critical illness policy sales is mainly a result of lower mortgage-related product sales.
"People need to take action to protect their mortgage commitments against financial shocks. This will lead to greater consumer resilience and a better-protected mortgage book for lenders.
"While consumers now go through a more rigorous approach when taking out a mortgage loan, circumstances can change and the industry owes it to customers to point this out. Protecting income commitments for so-called Generation Rent is just as important."
Ron Wheatcroft, technical manager at Swiss Re (pictured) said: "While most term assurance business is still placed through traditional distribution channels, it is good to see that direct to consumer propositions are appealing to more of our potential customers.
This is a very good start: our challenge will be to extend this to more complex areas such as protection against disability risks if consumers wish to buy in that way. Technology will help but the industry o needs to speak to them in plain and jargon-free language. Otherwise, they will just step away."
Further reading
Protection market grows by 4.1% in 2014 - Swiss Re
Swiss Re Group Watch: Excepted group life sum assured grew by 30.9%
