Financial advisers are surprisingly upbeat about the short-to-medium term future of protection sales in spite of the current pandemic.
Advisers polled by HSBC Life found that the majority of advisers have confidence in the individual protection market as a whole and in their own businesses over the next two years.
The study, which was conducted as the coronavirus crisis forced the UK into lockdown, found advisers specialising in individual protection forecast 14% growth for the advised protection market by 2022.
Almost two thirds (65%) of advisers believe there is an opportunity to grow the advised market substantially in the next two years.
Half (50%) of advisers expect most growth to come from sales of critical illness insurance while a similar number (47%) believe income protection insurance is most likely to benefit from the expanding market.
There is also a growing recognition among clients that protection products are important, the poll shows, with 61% saying cover is regarded as “very necessary” by many customers. However less than two out of five (38%) believe policies are seen as affordable, which could be a potential “brake” on growth in the advised market.
Mark Hussein, CEO of HSBC Life, said the cover that protection offers customers is “increasingly seen as invaluable”, with people recognising that looking after themselves and those they love is a “vital” investment.
He said: “Recent events have only served to underline this thinking. We have recorded a 30% increase in visits to our life insurance webpages, emphasising increased awareness and demand for protection products and reinforcing the opportunity for advisers.”
Hussein added: “Advisers are resilient and adaptable and are seeing there is an opportunity to demonstrate their value and expertise to customers, while also growing their own businesses supporting customers in protecting what is valuable to them.”
|POLICY||PERCENTAGE OF ADVISERS|
EXPECTING SALES GROWTH
OVER NEXT TWO YEARS
|Health Cash Plans||34%|
|Accident and Sickness||32%|
|Private Medical Insurance||31%|
|Whole of Life||20%|
|Total Permanent Disability||12%|
Survey by PollresAdvisers identified the increase in self-employment and the gig economy as a potential source of growth for the advised protection market in the next two years – currently nearly 4.7 million workers are classified as self-employed while 2.8 million are estimated to work in the gig economy.
More than two out of five (41%) advisers believe the growth of the gig economy will boost sales of advised protection products, while 30% believe the self-employed will fuel sales of protection cover over the next two years.