Life Insurance in the UK Industry Market Research Report Now Updated by IBISWorld

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The Life Insurance industry in the United Kingdom has been severely affected by the financial crisis and subsequent recession. Growth in revenue that was achieved in the pre-crisis days was quickly wiped away over 2008-09. Business expenditure on group policies fell while households dropped their cover to deal with more pressing financial responsibilities. More detrimental to the industry's revenue and bottom line was the steep fall in investment income, most of which came from depreciating share values, cutbacks in dividend payouts and depreciating property yields. Overall industry revenue is estimated to decline by an annualised 17.4% over the five years through 2012-13, to £25.3 billion. This includes a forecast fall of 34.1% in 2012-13. Premium growth is expected in the next five years as disposable incomes and employment increase due to a rebounding UK economy. This will be hampered by continuing uncertainty in the eurozone. The industry is also expected to generate growth in investment returns as confidence returns to financial markets. Overall industry revenue is forecast to return to growth over the coming five-year period to 2017-18. At the company level, success will be achieved through a gradual build-up of capital strength following a greater focus on risk management, market hardening, population growth and an increasing awareness about the need for sufficient life and income protection. For these reasons, industry research firm IBISWorld has updated its report on the Life Insurance industry.

IBISWorld Market Research

IBISWorld Market Research

Revenue will rebound as consumers give risk management more attention

The Life Insurance industry in the United Kingdom has been severely affected by the financial crisis and subsequent recession. Growth in revenue that was achieved in the pre-crisis days was quickly wiped away over 2008-09. Business expenditure on group policies fell while households dropped their cover to deal with more pressing financial responsibilities. According to IBISWorld industry analyst Iyman Uvais, “more detrimental to the industry's revenue and bottom line was the steep fall in investment income, most of which came from depreciating share values, cutbacks in dividend payouts and depreciating property yields”. Overall industry revenue is estimated to decline by an annualised 17.4% over the five years through 2012-13, to £25.3 billion. This includes a forecast fall of 34.1% in 2012-13.

Premium growth is expected in the next five years as disposable incomes and employment increase due to a rebounding UK economy. This will be hampered by continuing uncertainty in the eurozone. The industry is also expected to generate growth in investment returns as confidence returns to financial markets. Overall industry revenue is forecast to return to growth over the coming five-year period to 2017-18. Uvais adds, “at the company level, success will be achieved through a gradual build-up of capital strength following a greater focus on risk management, market hardening, population growth and an increasing awareness about the need for sufficient life and income protection”.

Total revenue generated by the Life Insurance industry is derived by the sum of premium income and investment income. IBISWorld estimates that the industry exhibits a low level of market share concentration. Over the past five years, the top four companies are estimated to have controlled between 15% and 25% of total market share, and are currently estimated to control 19.2%. Major companies include Aviva, HBOS, Standard Life and Legal & General Group.

For more information on the Life Insurance industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.

IBISWorld industry Report Key Topics

The Life Insurance industry comprises companies that provide life insurance cover and life-based investment products. Life insurance (or life assurance) is a contract obligating the insurer to pay designated beneficiaries a sum of money in the event of the insured individual's death, disablement, serious illness or injury. As with all insurance contracts, exclusions may apply that limit the insurer's liability such as suicide, riot or war.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 3008 6568.

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