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Tom Baigrie: How to arrest the protection market’s decline?


Have you seen the terrible figures for last year’s protection sales in the Swiss Re Term and Health Watch report 2014?

Term sales are down 17.4 per cent year on year, critical illness is down 21 per cent and IP is down 24 per cent. And if you compare those to the height of the recession in 2010 the drops are even bigger.

The authors seek comfort in the fact that the small price rises caused by EU rule changes in 2012 look to have reduced re-broking to just 15 per cent, but that also means that 15 per cent fewer people bought protection than the already very low figures imply.  Protection is a small market shrinking.

We optimists will be hoping that the much improved mortgage market will help get things back onto an upward trend, but it seems to me a key part of protection’s problem is that for so many of its big distributors it is a sideline, and those whose big thing it is do not have the vision or power to make it mainstream for others.

So this column begins to feel like one of those Old Testament types you used to see on the street proclaiming “The End Is Nigh”.

It is five years since a few of us first suggested that the industry needed to do something seismic to become relevant to the consumer zeitgeist once more. Almost everyone agreed, but not with enough enthusiasm, and it all finally died when the two biggest insurers, and indeed Swiss Re itself, made clear that they would not back any sort of communal effort – I suspect because it might have helped increase competitor brand awareness and reduce the biggest players’ market share.

Since then, bar a few small tester campaigns there has been little significant effort to impress consumers. 

Yet our products need to be marketed. But, except by word of mouth as a secondary product line for IFAs or as an adjunct to mortgage broking and price comparison efforts, they simply are not. 

I generalise, of course. There are plenty of good things in the market. But the numbers make it clear that we are declining into irrelevance, even if maybe not at the cataclysmic rate of 20 per cent every year.

So what’s to do?

Efforts are being made.  Zurich’s Gary Shaughnessy has the right idea in engaging with the Treasury on the economic benefits of tax relief on IP. It might look like an outside chance just now but I’m told that the industry’s most influential lobby group, Tisa, intends to open a protection committee this autumn, and that will shorten the odds nicely.

And the trade has backed the Seven Families effort, which looks pretty much ready to go in a very credible format. These are good things, but if we are to get consumers thinking of protection as part of normal spending, what’s needed is much more marketing by providers, supported by intermediaries. 

Do the new generation of provider leaders have an appetite for arresting their market’s decline?   

Tom Baigrie is chief executive of Lifesearch



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  1. That is odd to hear of the decline. If you take into account the fact that the major high street banks unceremoniously dumped their Level 4 qualified advisers. You would have thought they would have been pistol-whipping the remaining ‘protection salespeople’ to replace the lost profit no??? Oh yes, I forgot, they never stopped charging Clients the 0.5% for ongoing advice and never told them their Advisers had been made redundant. So really is it a suprise, they get to keep 0.5% of £40+bn whilst having no salary overhead…..Genius really if you think about it! How do you say ‘ nice work’ in Portugalise anyone???

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