Protection push failed at the cash point
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The protection sector began the year in subdued form. As the housing market continued to suffer, sales of mortgage-related protection also fared badly.
But sales of non-mortgage-related whole-of-life cover rose strongly and critical-illness insurance business picked up in the second half.
In a bid to boost the whole protection market and generate some consumer awareness, February saw the arrival of the Consumer Protection and Insurance Engagement Campaign.
Driven by Lifesearch managing director Tom Baigrie, it was well received by many in the industry and set itself the goal of launching a consumer generic advertising drive to highlight the chronic shortage of protection insurance.
However, the campaign’s £5m price tag and differences between product providers proved too much of a hurdle in the economic climate and the year ended with the campaign failing to get funding.
A more positive note for the market was the exclusion of protection sales from the retail distribution review. Fears that the FSA’s review of investment business would be expanded to include protection sales, bringing with it a ban on commission, had prompted commentators to predict that the protection market would be badly hit. But it is likely the RDR will be confined to investment-related business and protection will remain unaffected by a commission ban in other sectors.
The second half of the year also saw much attention focused on the issue of long-term care.
The Government’s green paper published in the summer and Conservative proposals at the autumn party conference have seen different models put forward to address the need for more funding for care for the elderly.
With both Labour and the Tories proposing the option of some form of public/ private partnership, the protection industry has at least one area of growing business to look forward to in 2010.
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