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

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The UK Life Insurance industry was severely affected by the financial crisis and subsequent recession but over the coming five-year period through 2018-19, industry revenue is projected to rise at a modest rate driven by premium growth and expanding investment returns as disposable incomes and employment increase due to a rebounding UK economy, as well as confidence returning to financial markets. For these reasons, industry research firm IBISWorld has updated its report on the Life Insurance industry.

IBISWorld industry market research
The industry's dependence on financial markets will leave it open to volatility

The UK Life Insurance industry has been severely affected by the financial crisis and subsequent recession. Revenue growth achieved before the crisis was quickly wiped away over 2008-09. According to IBISWorld industry analyst Iyman Uvais, “the stock market plummeted and unemployment rose, resulting in business expenditure on group policies falling and households dropping their cover to deal with more pressing financial responsibilities, but it was the steep fall in investment income that damaged industry revenue most seriously.” Share values dropped, dividend payouts were cut back and property yields depreciated.

In 2008-09 industry revenue crashed by 98.6% to just £931.3 million as investment losses soared and premium income fell sharply. Investment returns rebounded in 2009-10 and have remained highly volatile despite remaining positive. Demand for insurance remained poor for much of the period and is expected to increase only marginally in 2013-14. When combined with the current hardening cycle, this is anticipated to give a small boost to premium income. Investment income is expected to remain stable during the current year as stimulus measures help to calm financial markets. However, global uncertainties could still severely hamper investment returns. Revenue is expected to increase by 11.5% to £62.7 billion in 2013-14, but most of this will come from investment returns rather than premiums. Over the five years through 2013-14, industry revenue is estimated to grow at a compound annual rate of 132.1%. This extremely high growth rate is primarily due to colossal investment losses dramatically shrinking industry revenue in the base year.

Uvais adds, “premium growth is forecast to increase over the next five years as disposable incomes and employment increase due to a rebounding UK economy and the industry is also expected to generate expanding investment returns as confidence returns to financial markets.” As a result, industry revenue is projected to rise at a modest rate over the coming five-year period through 2018-19. Nevertheless, growth will be constrained in the short term by high unemployment and stagnant disposable incomes. Investment returns are likely to be volatile early in the period. However, the current hardening cycle is expected to continue and favourably influence revenue in the short term.

Total revenue generated by this industry is derived by the sum of premium income and investment income. IBISWorld estimates that the Life Insurance industry exhibits a low level of market share concentration. Over the past five years, the top four companies are estimated to have controlled between 12% and 25% of total market share. They are currently estimated to control 14.5%. Major companies, based on total revenue, include Aviva, HBOS, Standard Life and Legal & General.

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

Firms in the industry provide life insurance cover and life-based investment products. Life insurance obliges the insurer to pay designated beneficiaries a sum of money in the event of the insured individual suffering 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 or call (020) 3008 6568.

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Gavin Smith
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