There is no denying that this year has been a difficult one for the protection market.Growing competition has come at a time when the mortgage market has been relatively flat. We have seen pressure on pricing with new and established competitors fighting for a share of a market which has fallen in volume terms by almost 17 per cent (comparing ABI data from the first half of 2005 to that of 2004). Much of this fall can be attributed to lower levels of mort- gage transactions. From a protection perspective, the story of the housing market in 2005 started with the introduction of mortgage regulation at the end of 2004. This heralded a longer sales process and did little to stimulate a flat market. But the predominant feature of 2005 was the growing use of technology. Online trading has become a significant feature of the market, with interactive underwriting systems streamlining the processes for advisers to submit business. Such systems enable providers to execute online sales and offer terms in many cases. Providers which have taken steps to implement straight-through processing systems will already be starting to see the benefits in terms of customer service. Technology is key to service standards and is becoming one of the chief ways to differentiate between the better and poorer providers. If we saw few develop-ments on the product side in 2005 this is likely to change as we look ahead to 2006. Pension term assurance will be a big issue. At present, industry experts appear unable to agree whether it will produce significant new business or merely a limited rebroking opportunity. What is likely is that cost savings will be there for some customers. But a word of caution should be sounded – a large proportion of mortgage business is written on joint lives, more often than not with critical-illness cover and waiver. It is too early to tell whether we will see a move to two single-life plans complemented by stand-alone critical-illness cover or a move towards income protection alongside term. Good quality advice given in the past will not be invalidated overnight because of a new, basic product with tax relief. Less protection with tax relief is hardly a positive message to the customer and seems hard to justify with the loss of the cover just mentioned. Already there is justified criticism for underselling of waiver. The second product issue is the further round of ABI critical-illness working party definition changes which are expected later in 2006 and will be aimed at improving clarity and understanding. If few providers are likely to invest significantly in new product development, more will focus their expenditure on technology instead. More e-commerce and better systems should produce winners all round. There is plenty to look forward to in the coming year but there are two counter-balances. The protection market may now be entering a phase of oversupply. Since mid-2004, there has been a steady growth in the number of new entrants so it can be said with certainty that competition will continue to be keen. Trends in repricing activity and improving service quality look set to continue. The mortgage market will continue to influence the protection market and if we are to see any signs of significant recovery in the latter, we need to start looking for clues in the overall state of the economy and perhaps a further fall in interest rates would be helpful. It would be churlish to end on a negative note and unnecessary too. There are plenty of challenges to whet the appetite. One challenge we should be looking forward to is in educating the public. Research conducted recently by Swiss Re highlighted a 2.3 trillion sum assured protection gap. Turning this astounding figure into something meaningful to consumers so we can look to grow the market as a whole over the longer term should be on everyone’s New Year’s resolution lists.