LONDON – August 7th, 2001
Leading reassurer GE Frankona Re’s most recent survey of
the stand alone term assurance market has shown Internet sales beginning to make some headway.
With overall term assurance sales up by 8% in 2000,
Internet sales accounted for over 30,000 policies, or 3% of sales.
Peter Elliott, Head of Sales at GE Frankona Re, commented,
“It comes as no surprise that Internet sales are beginning to make an inroad into
term distribution. The product is simple to understand, and is keenly priced, both of
which make it ideal for distribution over the Internet.”
Elliott continued, “We expect e-sales to flourish as
UK consumers become more comfortable with purchasing life products over the Internet.
Experience in the motor market and in Internet sales in general, where UK purchasers are
leading the way in Europe, both point to a promising future for this distribution channel.”
Level term polices remain the favoured plan type accounting
for 51% of total sales. Meanwhile, the decreasing term market, which accounted for 36% of
total sales, continues to closely track the mortgage market.
The trend between the two markets is very similar although
there are a number of factors that contribute to the difference between the average sum
assured and the average mortgage value. For example, many existing borrowers will already
have term assurance cover on their previous loan and will only be topping up cover to the
new mortgage amount.
Other key survey findings:
Total stand alone term assurance sales 1,054,703 in 2000 (up 8% on 1999 sales )
Total in force policies 7,291,026 – representing a 25% penetration of
the UK working population
Level term assurance remains the favoured plan type
accounting for 51% of total sales, followed by decreasing term assurance (36%), pension
term (4%), family income benefit (2%), renewable term (2%), convertible term (1%). The
remaining 4% of sales is made up of a variety other term plan types.
The survey being reported here covered providers of stand
alone term assurance only. Sales by providers of accelerated critical illness term
policies were covered under a separate survey on the critical illness market issued by GE
Frankona Re in April 2001. This earlier report showed sales of accelerated critical
illness term policies increased by nearly 53% from 341,126 in 1999 to 521,713 in 2000.
This policy type now represents by far the largest proportion of total critical illness
new business, accounting for 66% of the market (42% in 1999).
GE Frankona Re is part of Employers Reinsurance Corporation, a GE company, which is the world’s
fourth largest reinsurer and a premier global provider of risk solutions.
ERC serves clients in property and casualty, life,
healthcare, and professional liability insurance and reinsurance, and other risk
management services. ERC has earned the highest ratings in the industry: More information
on GE Frankona Re is available at www.ge-frankona-re.com.
For any further information/queries, please contact:
GE Frankona Re
Tel: 020 7337 9597
Mobile: 07768 008557