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IFAs grow their critical mass

IFA sales of critical-illness cover leapt by 22 per cent last year.

The number of policies sold by IFAs rose from 220,730 in 1998 to 270,440

in 1999, according to the HealthWatch 2000 report from Swiss Re Life &

Health.

This gave IFAs a 34.5 per cent share of the market – up from 31.8 per cent

in 1998 – while the slice taken by direct salesforces and appointed

representatives was cut to 62.6 per cent from 66.6 per cent in 1998.

The number of new individual critical-illness policies sold by direct

salesforces and appointed reps was 490,479 last year compared with 462,364

in 1998.

CGU topped the league for critical-illness sales at 86,910 new policies,

followed by Legal & General with 86,271 and HSBC Life with 58,128.

Looking at the market as a whole, sales of critical-illness cover as an

accelerated benefit on mortgage endowment contracts improved last year

despite a shrinking of the mortgage endowment market, with 15 companies

withdrawing.

This resulted in a reduction in total mortgage endowment sales from

636,000 in 1998 to 596,000 last year. By contrast, the report says sales of

mortgage endowments with a critical illness rider increased over the same

period from 266,016 to 302,442, representing 50.7 per cent of the mortgage

market.

Ron Wheatcroft, technical manager at Swiss Re Life & Health in the UK,

warns: “Once again, this year&#39s growth is linked to the buoyant mortgage

market and there is concern that a downturn in mortgage-related business

will result in a fall in new health protection sales.

“Increasing consumer awareness of the need for self-provision and to

provide income replacement is, however, now being reflected in sales

figures and there is a clear challenge here for product providers to extend

their repertoire.”

While sales of critical-illness cover and income-protection policies

increased, sales of long-term care policies were “meagre”.

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