Income protection sales declined by 24 per cent in 2013, falling below 100,000 policies for the first time in 10 years.
Swiss Re’s latest market snapshot report for individual protection shows there were 90,794 IP policies sold, down by 24 per cent compared to 120,094 policies in 2012.
Swiss Re says year-on-year comparisons should be treated with caution as the introduction of gender neutral pricing at the end of 2012 may have skewed the figures.
But sales across all product areas are still significantly down compared to previous years.
Compared to 2011, when there were 110,472 IP policies sold, 2013’s IP sales are down by 18 per cent.
Critical illness sales declined by 21 per cent last year. There were 445,679 policies sold in 2013, down from 560,911 in 2012. In 2011, there were 551,382 policies sold.
Whole of life sales, meanwhile, fell by 21 per cent last year. Sales dropped from 344,110 in 2012 to 273,423 in 2013.
Sales of term assurance saw the smallest year-on-year decline at 17 per cent. There were 1.2 million policies sold last year, compared to 1.5 million in 2012. In 2011, there were also 1.5 million policies.
Swiss Re says the impact of gender neutral pricing does not hide the fact there are challenges in the market, of which it believes consumer apathy is the most difficult.
But it says the increases in premiums at the end of 2012 means last year’s figures provide a more realistic view of genuine new business, rather than rebroked business, than in previous years.
The report says: “While disappointing in simple percentage terms, perhaps 2013 provides a more realistic view of genuine new business, with fewer opportunities to replace existing cover at lower cost. Comparing 2014 with 2013 data should provide a better indicator of market growth.”