Mortgage News
Income Protection sales fall 7%
The protection market is shrinking and becoming more concentrated in the hands of a few providers, according to figures from the FSA.
Sales of pure protection products dipped by 1% in 2010/11 compared to the previous year.
The FSA confirmed to Mortgage Solutions sister-title COVER that this was predominantly fueled by a 7.7% dip in income protection (IP) sales and a 25.6% fall in stand alone critical illness (CI).
However, CI when sold as a rider benefit grew by 2.8%.
The regulator noted that the decline in mortgage sales has hit both sellers and providers in the market and also identified the trend towards a higher market concentration.
In all three protection markets the five largest provider firms combined for more than 60% of the business share.
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Banks and Building Societies gained substantial market share as providers, to the detriment of insurance companies, the FSA continued.
Last year 89% of pure protection contracts were sold through non-provider firms acting as intermediaries, an increase from 86% in 2009/10.
This rise was mostly driven by income protection products.