A new study has found that independent advisers increased their share of individual protection sales across all types of policy last year. Independent brokers mainly increased their share by taking business away from tied agents.
The Term & Health Watch report, conducted by insurer Swiss Re, showed that independent advisers increased their share of protection products in 2009, including as life insurance, term insurance, critical illness cover and income protection.
The figures for 2009
The share of term life insurance plans brokered by independent firms rose from 50.2 per cent in 2008 to 53.5 per cent in 2009. The share of critical illness plans rose from 47.6 per cent in 2008 to 50.3 per cent in 2009. For income insurance the share rose from 46 per cent in 2008 to 50.3 per cent in 2009.
The majority of these gains were taken from tied agents, who can only sell the products of one particular insurer, who saw correspondingly equal falls in their market share for these policies.
Over the year, from 2008 to 2009, new term insurance sales rose by 4.1 per cent, whole of life insurance sales rose by 12.6 per cent and critical illness sales rose by 3.8 per cent. Income cover was the only area to see a decline in new sales, falling by 7 per cent over the year on an extraordinary number of new sales in 2008.
Positive for consumers
It is extremely positive to see consumers recognising the value added by independent advisers, who have the whole of the market to consider when recommending protection plans to their clients.
Not only do consumers get a much better deal by going to an independent broker but they also receive an altogether better quality of advice. The recommendations made by tied agents are limited by the products they can offer and it is therefore very unlikely the consumer is getting the most appropriate policy for their needs or the most competitive rate given their demographic.