Amid economic gloom, UK independent financial advisers (IFA) are
seeing a ray of hope in the protection market. This is the
conclusion drawn by the leading insurer in the UK market, Legal
& General (L&G) from its second quarterly survey of IFA
confidence levels.
In its protection market surveys L&G assesses:
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• Current/ future sales;
• Current/ future opportunities to discuss protection with
potential clients; and
• Current/ future ease (or difficulty) of converting those
opportunities to sales.
L&G converts its assessment into an index format with anything
above 100 indicating a positive trend and anything below 100 a
negative trend.
Based on fourth-quarter 2008 to first-quarter 2009 sales, IFAs
reported a seven point improvement while looking at prospects six
months hence they reported a 22 point improvement.
Sales opportunities between the fourth quarter of 2008 and first
quarter 2009 were unchanged, while for opportunities over the next
six months the index was up just one point.
The conversion index between the fourth quarter of 2008 and the
first quarter 2009 was up six points and the conversion index over
the next six months was up nine points.
“It is very encouraging to see that IFAs believe their protection
sales are better than three months ago and that they are finding it
slightly easier to convert potential sales into actual sales,” said
L&G IFA sales director Martin Noone.
“However, even more promising is the outlook for the market. All
three of our future indices are up, which means that advisers are
predicting greater commercial success in six months’ time.”
On the product side, Noone said advisers have informed L&G they
are selling more term assurance, critical illness cover and
business protection, but less income protection and family
protection.
Quoting Swiss Re’s Term & Health Watch Report 2008, L&G
noted that in 2007, 1.5 million individual term assurance policies
were sold in the UK, with an average sum assured of £125,000
($184,000). Over half a million critical illness cover policies
were sold with an average sum of £92,000.
During the same period, there were also 111,000 income protection
and 219,000 whole of life policies sold.
