Income protection was the standout performer in 2024’s individual protection market, with new policy sales up 18 per cent, according to Swiss Re’s latest Term & Health Watch report.
According to the report, produced with iPipeline, the long-term individual protection market overall grew by 2.2 per cent, with just over 2 million new policies sold across Term Assurance, Whole Life, Critical Illness, and Income Protection.
Policies paying out to normal retirement age jumped by 36.6 per cent, up from 12 per cent growth in 2023, while two-year limited payment term policies rose by 1.3 per cent. These short-term policies made up 49 per cent of all income protection sales.
Sales of Term Assurance with Critical Illness cover dropped slightly, down 0.8 per cent (11,577 fewer policies). Decreasing Term Assurance rose by 3.6 per cent, showing signs of recovery after a weak 2023. Term Assurance without Critical Illness stayed flat.
Whole Life policy sales continued to decline. Guaranteed acceptance policies fell by 1.5 per cent, and underwritten policies without Critical Illness cover dropped by 8.2 per cent, ending a period of consistent growth.
Additionally, research suggests that more people are buying protection with advice, as non-advised sales fell 6.5 per cent in 2024, after a 27 per cent drop in 2023.
Joanna Scott, author of Term & Health Watch 2023 and Technical Manager & Industry Affairs Manager, L&H UKI, at Swiss Re said the findings are reflective of another unpredictable year for UK households, with a change of Government and rising geopolitical tensions further afield.
Swiss Re technical manager & industry affairs manager, L&H UKI Joanna Scott says: “2024 was another busy year in the UK, both politically and economically. In a continued high-interest rate environment with cost pressures mounting for households, it’s encouraging to see so many pockets of positivity – not least in the realm of Income Protection and Decreasing Term sales. This was in no small part down to improvements in the mortgage market.
“Looking ahead, a defining feature of the second half of 2025 will be maturing mortgages from the Covid-19 pandemic house buyers’ cohort. With the holders of cheaper fixed-rate mortgages facing an increase in repayments of 200bps-250bps, it will be interesting to see what impact this has on protection take-up.
“The Government is on a clear mission to keep people in work as part of its plans to boost productivity. The Keep Britain Working review, led by Sir Charlie Mayfield, has shone a real light on the role of employers and what they can do. But it has also highlighted the role of income protection insurance in supporting people both financially and medically while minimising Government spending.
“Sales of NRA and LPT products are now split 51:49. This is hugely positive when considering the potential impact on the welfare state if an employee is unable to return to work before the end of a policy’s payment period. But there is still a long way to go.
Another noteworthy trend was the growth in Stand-alone Critical Illness (SACI) for lower average sums assured. SACI sales increased by 36,497 in 2024, while term with CI sales fell by 11,289. The total number of new CI policies, attached to life cover and stand-alone combined, increased by 2.5 per cent, to 545,251.
“The steep increase in SACI sales suggests that CI sales are slowly becoming less tied to the sale of mortgages as the main distribution channel. It could also be indicative of a trend towards people taking out smaller add-on cover as part of a menu plan.”
iPipeline product strategy director Paul Yates says: “Advisers are increasingly realising greater value from the protection market as they refine their sales and recommendation processes to better meet their clients’ holistic protection needs. Our latest data highlights improved efficiency, with stronger quote-to-policy conversion and a growing preference for multi-benefit plans – increasing product density per client. Multi-benefit plans now represent over a third of all protection sales.”
“We’re also seeing a clear shift toward quality over cost, with advisers placing less emphasis on just the lowest-priced options. The continued growth in APE (£) relative to new policy volumes underscores this trend. It’s a compelling sign that advisers are delivering more comprehensive protection solutions for their clients.”
