Sales of new income protection policies in the UK surged by 18% in 2024, outpacing other product categories within the individual protection market, according to Swiss Re's latest report.
The report recorded 2,041,428 new individual protection policies sold during the year across term assurance, whole life, critical illness, and income protection – an overall increase of 2.2% from 2023. However, performance varied across different lines.
Sales of term assurance policies that included critical illness (CI) benefits fell by 0.8%, representing a reduction of 11,577 policies. Within this category, decreasing term assurance policies grew by 3.6%, reversing a decline seen in 2023, which marked the lowest sales level for the product type since 2016. Term assurance policies without CI benefits remained flat.
Income protection showed the most pronounced growth. New policy sales increased by 18%, compared with a 10% rise in 2023. Of those, 49% were limited payment term (LPT) policies. Two-year LPT policies grew by 1.3%, down from 12% growth in the previous year.
In contrast, policies linked to normal retirement age (NRA), which allow benefits to be paid until policy expiry, rose by 36.6%, up from 12% growth in 2023.
This growth in income protection aligns with a broader industry trend. Data from the Association of British Insurers (ABI) show that individual income protection sales reached a record 247,000 policies in 2023. The upward trajectory continued into 2024, reflecting increased consumer focus on income stability amid economic uncertainty.
Sales in the whole life segment continued to lag. Guaranteed acceptance whole life policies fell by 1.5%, while underwritten whole life policies without CI benefits dropped by 8.2%, marking a reversal after several years of sustained growth.
Joanna Scott (pictured above), author of the report and technical and industry affairs manager for Swiss Re’s UK and Ireland Life & Health division, said the findings reflect the broader political and economic volatility in the UK in 2024, including a change in government and geopolitical uncertainties.
“Looking ahead, a defining feature of the second half of 2025 will be maturing mortgages from the COVID-19 pandemic house buyers' cohort. With the holders of cheaper fixed-rate mortgages facing an increase in repayments of 200bps-250bps, it will be interesting to see what impact this has on protection take-up,” Scott said.
Longer-term projections reinforce the importance of the critical illness segment. According to market research, the UK critical illness insurance market is expected to grow from US$12.75 billion in 2024 to US$27.5 billion by 2035. This anticipated expansion is attributed to rising consumer awareness, increasing healthcare costs, and a broader recognition of the financial impact of severe medical conditions.
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