Financial advisers in the UK expect the individual protection market to grow significantly in the next two years, both as a whole and within their own business.
According to a survey by HSBC Life, which was conducted as the UK went into lockdown, planners believe the advised protection market could grow by as much as 14% by 2022.
They predicted that, as a result, their firm’s sales of related products would expand in tandem.
Considering these views, nearly two thirds (65%) of those surveyed said that there is an opportunity to significantly increase the sector, despite the challenges posed by the coronavirus pandemic.
To some degree, nearly all agreed that there will be some growth in the market, HSBC Life said.
Advisers believe that the growth will probably come from people looking for the security that protection products can provide, especially in the light of covid-19.
They said that the increase in self-employment and the expansion of the gig economy could be a potential source of growth for the advised protection market, since nearly 4.7 million people in the UK are classified as self-employed and roughly 2.8 million work in the gig economy.
And as these working structures grow, 41% of planners believe that demand for protection products will increase; with 30% believing that the self-employed will fuel the sales of protection cover in the next two years.
Looking for value
The products which are most believed to see greater growth are critical illness insurance (50%), followed by income protection (47%).
While most advisers (61%) believe that their customers see protection products as necessary, only 38% said that these types of policies are seen as affordable.
Mark Hussein, chief executive of HSBC Life UK, 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.
“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.
“It is interesting that so many advisers at this time are optimistic about growth in the advised protection market, despite the uncertainty and that they believe critical illness and income protection are likely to be the biggest opportunities for growth over the next two years as the protection market expands,” he added.
HSBC Life’s survey was carried out between 1 and 25 March 2020 by research company Pollright and surveyed 108 independent financial advisers which specialise in the sale of protection products.