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IFAs facing a challenge in income protection sector

Income protection sales sho-wed a “disappointing” 3 per cent rise last year, a further indication that providers are failing to penetrate the market, claims reinsurer GE Frankona.

In its survey of the IP market in 2001, GE Frankona says the overall growth in the market was fuelled by sales of budget-style products which offer less coverage and charge lower premiums.

Budget sales, which are often linked to mortgages, increased by 25 per cent to 35,168 from 28,066 in 2000 while sales of traditional plans dropped by 2 per cent to 148,701 from 151,383.

IFAs accounted for 44 per cent of sales, selling 53 per cent of standard plan sales but only 8 per cent of budget sales.

Tied salesforces and bancassurance took 33 per cent of overall sales, with appointed representatives making up the remaining 23 per cent.

By the end of 2001, there were 1.3 million individual plans in force, up from 1.26 million in the previous year.

An additional 1.8 million lives were covered under group schemes. Further details about group business will be forthcoming in two weeks when GE Frankona publishes its group survey.

Marketing analyst Louise Roche says: “The continued success of budget income protection comes as no surprise, given the ongoing housing boom and the fact that over 90 per cent of budget income protection sales are linked to mortgage protection. The market for the traditional product is clearly not growing. As this is where IFAs generate most sales, they clearly have a challenge ahead of them.”


Field annuity bill wants clients told of all rates

Labour MP Frank Field has tabled a bill which aims to force annuity providers to supply policyholders with competitors&#39 rates when buying an annuity.It comes as the Government continues to hold highlevel talks with industry exp-erts about extending access and advice to annuities.The Treasury last week held a meeting with 25 industry figures, including representatives […]

Health warning for pensions in NI rise

The Chancellor&#39s hike in National Insurance contributions may be good news for the NHS but the knock-on effects could mean an unwelcome blow for pension savings.Many in the industry see a certain irony in the Government&#39s plans to improve a health service that will increase longevity having the consequence of damaging the ability of people […]

Borne in the USA

The US is often accused, sometimes rightly, of leading the world in financial matters. It has blazed a trail by embracing direct equity investment, showing an increased propensity to invest in mutual funds and indicating a generally higher perception of investment risk.The US consumer is also far more willing to pay directly for financial advice […]

Equitable must review cut decision says consultancy

The Equitable Life Board must review its decision to slash the value of pension policies which are approaching maturity as policyholders will need retirement income sooner rather than later says consulting actuary Punter Southall & CO.It is unfair to penalise older policyholders who will need income from their policies soon says Punter Southall principal Caroline […]

Retirement - thumbnail

A downhill stroll?

The Department for Work and Pensions (DWP) has recently published new research, which once again demonstrates how the prospect of retirement is changing for older workers.


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