Insurers are likely to reintroduce unemployment cover into more products in 2021, after out-of-work cover was withdrawn by some income protection providers this year, an industry analyst has said.
GlobalData said that many insurers in the UK have temporarily withdrawn IP products providing unemployment cover.
The data and analytics specialist said it expects gross written premium (GWP) in the market to decline by 26.5% in 2020, following a period of “consistently strong” growth. However, the analyst expects the market to bounce back in 2021, with predicted growth of 35.8%.
Beatriz Benito, Senior Insurance Analyst at GlobalData, said COVID-19 is bound to increase unemployment, forcing many individuals to postpone plans for home purchases in the near future.
But she added: “However, it will also leave renters vulnerable to continue renting long-term.
“Purchasing a house is one of the main triggers for consumers to purchase an IP policy, so this will be a key short-term factor.
“There was a surge in demand for IP products at the outset of the pandemic as consumers became increasingly wary about their job security.
“Therefore, the decline in GWP has been largely due to the insurers and GlobalData expects consumer demand to remain high, which is why the company forecasts such strong growth for 2021 and expects insurers to reintroduce unemployment cover.”