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Protection at standstill but CI cover is resilient

Peter Le Beau
Le Beau: ’Mood of the moment’

Pure protection sales were broadly static in 2009/10 at 597,986, a marginal dip of 0.2 per cent from 599,203 in 2008/09.

The FSA data on product sales between April 1 2009 and March 31 2010 also reveals that sales of standalone critical-illness products rose by 5 per cent from 39,896 in 2008/09 to 41,802 in 2009/10.

Sales of income protection products decreased by 11 per cent from 117,377 in 2008/09 to 104,102 in 2009/10.

The proportion of protection sold on an advised basis remained virtually unchanged at 92 per cent, down slightly on 93 per cent in 2008/09.

The FSA also reveals that 60 per cent of all pure protection contracts were provided by the top five firms, up from 57 per cent in 2008/09. Most protection sales were made by personal investment firms with a 29 per cent share of transactions, unchanged from last year. This was followed by banks and building societies with 22 per cent of sales, up from 18 per cent in 2008/09. Life insurers had a 12 per cent share compared with 14 per cent in 2008/09.

Le Beau Visage managing director Peter Le Beau says: “With the mortgage market becalmed and economic confidence low, these figures were always likely to reflect the mood of the moment.

“Critical-illness sales are proving resilient but income protection is continuing to suffer probably because of a lack of adviser confidence in selling the product. The percentage of products sold by the top five offices shows the way the market is gradually consolidating. Overall, given the environment we are living in, these figures could have been worse.”

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