Life Insurance in United Kingdom
The life insurance market in the United Kingdom is the largest market in Continent of Europe and also the third largest insurance market in the world. But the life insurance coverage’s sales have been lethargic over the past ten years as the past surveys and their statistical analysis shows us. This article is written for the interest of the students, policyholders and also for the people who analyze the situation and use to calculate the insurance risks and also its premiums. I hope you will be able to make the comparisons with the home market (The UK insurance market) and also apply some learning points as well. This article will also make use of some of the observations from the United States market as well.
The main products of life insurance market are as follows:
First product that the United Kingdom life insurance market is offering is the critical illness insurance policy. In the UK this policy was first started in the early 1980s. This policy was initially paying an amount when a certain disease in diagnosed in a patient. This policy is just like a life insurance policy so if the patient dies he will receive the insurance money. The reinsurance had influenced significantly the market for some time. Competition for business with reinsurers cutting has been increased at a tremendous rate, which reflects improved mortality and the possibility of such improvement released. Life insurance companies have found the profit against their more cautious internal assumptions give rise Part of the risk, often as much as 100 Percent. The risk control has been entrusted market determine prices, including reinsurers.
The second product that the UK insurance market is offering is whole life insurance policy.Whole life insurance is a goal of signing inheritance tax planning. This is a niche market, and conditions become less competitive over the 50s policies, otherwise known as the funeral plans, payment of relatively small amounts of death are the most popular. No underwriting; this restriction, usually replaced by two years. Such projects are often sold through direct marketing with free gifts and recently criticized for offering poor value. Although they are significantly more expensive than term insurance sign, premium payment terms are often limited by age 80. Low interest rate environment shows some of the planned value of the investment view but are not marketed as such.
And the third product that the UK insurance market is offering is the income protection coverage. Income Protection enables customers to protect their income, a variety of products; they should be able to work due to illness or incapacity. Unemployment is sometimes covered. Most policies are sold based on an occupation. Limited sale in 2012 to the level of payment policies, are just beginning to appear on the market with some 120,000 policies in the one- to five-year payment claims and it has been well over two years of product the recent poor sales, only half of the sales of 2003.
Market price risk is dominated by Reinsurers; however it has become a double-edged sword. Increased cessions insurance companies have increased reinsurance by the intensity of competition in the reinsurance market conditions and over again drew attention to the rebooking. Due to Reinsurers margins have been squeezed, the market has become more commoditized and price is driven by the detriment of product innovation.