The UK's life insurance companies are going to have to work harder to gain the trust of their customers, according to a new market report from Datamonitor.
The UK life assurance market has been badly hit by poor stock market returns, weakened consumer confidence, high-profile scandals and ever-changing regulatory reform. However, a new report from independent market analyst Datamonitor, UK Life Assurance 2004, reveals that the life assurance market will grow by over 1.8 billion in the next four years to 5 billion as stock markets recover and protection products remain popular.
"Life insurance companies will have to work hard and make sure they have learnt their lessons from the last few years if they are to regain customer trust and interest," explained Liz Hartley, financial services analyst for Datamonitor, and author of the report.
Since 2000 the UK life market has fallen in value by almost 800 million, with a drop of over 600 million from 2002 to 2003 as a result of significant falls in single premium savings business (notably with-profits bonds), which has been badly affected by falling equity values, weak consumer confidence and negative press.
But while the savings side of the life market has suffered, the protection market has prospered, as premiums have risen by an average annual rate of almost 12% since 2000, so that protection products accounted for 40% of total life premiums in 2003.
Consumer appetite for protection (such as term assurance) has increased as the boom in consumer credit lines and the growth of the housing market has led to many consumers re-examining their loans and mortgage situation.
The report provides an overview of the total UK life market and its key products, providing market size statistics and distribution data, examination of key growth drivers, analysis of leading competitors, plus forecasts of premiums and distribution trends up to 2008.