Term assurance sales have hit a five-year high, with one in four workers covered by the end of 2001, according to the latest report from reinsurer GE Frankona Re. Research found sales for the year grew by 28% with 1,353,134 new sales in 2001, taking the total number of policies in force to 7,078,201.
Louise Roche, author of the report, said: ‘2001 was a remarkable year for term sales, outstripping the 8% increase we saw in 2000. The booming housing market has contributed to most of these sales and, as the market has continued to flourish, we expect to see good sales this year too.’
This growth was partly due to increased sales from IFAs, who increased their share of both level and decreasing term new business to 40% and 44%, up from 37% and 36% respectively.
The survey also found sales were increasingly concentrated among the top providers, with the top 10 increasing their market share of new business from 59% in 2000 to 71% last year.
But Roche warned providers would have to start tapping into new markets to sustain this growth: ‘The rate of concentration reflects the nature of pure mortality business. It is high volume, low margin ‘ and the big players have the volume. With the ongoing dependence on mortgage-related sales, providers need to increase other protection areas to ensure these volumes continue.’