Advisers predict protection gap to narrow with growing demand

The survey, which was conducted as part of IRESS’ Mortgage and Protection events in October, showed that the number of advisers who have seen demand for protection products increase in the last twelve months outnumbered those who saw it fall. 37% of advisers polled saw demand increase with one in ten reporting a significant increase. In comparison, just a quarter of advisers saw demand for protection products decrease over the same period.
 

Advisers believe 2015 is set to see even stronger demand with two thirds (65%) of advisers expecting demand for protection products to increase over the next twelve months. Just one in twenty (6%) expect demand to decrease, compared to 22% who foresee a significant increase.

Advisers believe demand for products supporting the self-employed will underpin the increase with 49% predicting that this type of protection product will see the greatest demand. The next greatest area of demand is anticipated to be protection for unemployment (13%), followed by self-insured products for dependants of policy holders (12%) and mortgage protection for retirees (12%).

Dave Miller, Executive General Manager, Sourcing at IRESS, commented:

“Protection for the self-employed is likely to be a key focus for advisers in the coming year, given its growth in this economic recovery. With self-employment now at its highest level since records began almost 40 years ago, it is almost a given that demand is increasing for these types of protection products. Equally the mortgage market is much healthier than a year ago and we expect mortgage protection sales to follow suit if mortgage lending continues to grow in 2015.

“There is a very well documented protection gap in the UK at present and while an increase in sales in these sectors of the market will go some way towards closing it, we need to continue to raise awareness of products such as income protection and critical illness to ensure this issue is addressed.”