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Big five under pressure as smaller firms make inroads

Swiss Re’s annual report says Legal & General, Norwich Union, Friends Provident, Scottish Widows and Abbey dominated the protection market last year but are under threat from smaller providers.

It shows that the five firms made up around 60 per cent of sales last year, joined by HSBC on income protection.

L&G has remained the leading provider of individual term insurance for three years. Last year, it sold 342,134 plans followed by NU, Friends, Widows and Abbey, including Scottish Provident.

The five insurers together wrote 991,961 policies, making up 62.6 per cent of total sales. In 2004, the five firms wrote 1,177,630 policies, representing 66.6 per cent of total sales. The report says this indicates that the top five insurers’ share is under threat from smaller providers which are starting to increase their market share.

On critical-illness insurance business, the same five companies represent 60 per cent of sales, together writing 379,133 policies. L&G sold most policies, with 95,289 plans, followed by Abbey, NU, Friends and Scottish Widows.

Income protection sales totalled 94,757, with Friends writing the most policies – 29,952, with NU on 22,044 and HSBC with 15,158.

Swiss Re technical manager Ron Wheatcroft says: “This indicates that some of the providers with lower volumes are beginning to erode the market share of the top five providers.”

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