• In respect of Term and CI last year we saw new business numbers fall by 5.9% and 5.5% respectively • In terms of IP new sales improved by 2% compared to 2021 • The average sum assured for all new term assurance sales, including term assurance with a CI benefit was £177,665 (an increase of 9.4% on the previous year) • The average premium for all new term assurance sales, including term assurance with a CI benefit was £371 (£359 in 2021) • In relation to Business Protection, there was a 15% increase in average new sums assured for level term key person policies in 2022 • The average sums assured were £694,403 up from £602,782 in 2021 and £540,563 in 2020 • Average new sums assured for level term key person policies with a CI benefit decreased by 2% to £290,205 (£297,636 in 2021 and £239,008 in 2020) • New IP policies used for business protection purposes were reported as 1,629. This increased from 1,354 in 2021 and from 1,194 in 2020 • Total premiums in Business Protection stood at £1,685,879 vs £1,366,081 in 2021 • Average premium of £1,035 per policy, almost 3x the average non-business Premium So, enough of reflecting on what happened last year, and let’s look at where we are heading in 2023 from an opportunity perspective. It’s pretty rare that anything I write nowadays gets to 600+ words without mentioning those three little words… The Consumer Duty. However when we look at opportunities for the remainder of 2023 and beyond, we cannot ignore what many believe is the biggest change to mortgage and protection regulation since ”M Day”. From our discussions, many DA firms are still coming to terms with the requirements and what they mean in practice, in essence “what does it mean for me?”. I will not go on a long diatribe here about the rights and wrong of the Consumer Duty implementation and the additional burden placed on firms in order to comply, however, please don’t ignore it whatever you do! As ever, these changes can be seen quite rightly as a carrot as opposed to a stick. There are clear examples of what is required to “avoid foreseeable harm” in every sector of the protection space whether it be mortgage, business or wealth related. Whilst I don’t expect the FCA to be ‘hunting’ for examples of non-compliance with the Duty on 1st August the day after the implantation deadline, we are already seeing instances of plans being required to adhere with every new application. In stark terms, it is unlikely that the FCA will spend over 50% of their annual budget on implementing the Duty and then not worry about it’s impact. I would just make the point that it will be important to be Consumer Duty “fit” in every area of your businesses as we move out of “implementation” phase and into the “reporting” phase. For those of you who may not have had the time to review the Paradigm Consumer Duty Hub yet, I would urge you to click here to at least try to gauge if you are on track. 05 SUMMER PROTECT NEWSLETTER Continued on next page...
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