From March 2018 to July 2018 rates for single life policies have generally moved down or remained the same as indicated in the table below. The sole exception was 10-year term policies for 50-year old non-smokers, the cost of which increased by 10 basis points. Across the board, rates for joint life second death policies remained unchanged.
The charts below show some of the recent trends in rates. Single life, guaranteed whole of life increased in the early part of 2018 before falling. The fall was more marked for age 60 and above. Joint life second death, guaranteed whole of life saw its rate increase in early 2018 before plateauing. This is suggestive of a softening in the guaranteed whole of life market, given that interest rates are on the rise. We are watching how the slowdown in the increase in life expectancy in the UK will play out in the whole of life market.
On 17 September 2018 rates dropped in the joint life second death term rate market due to a new offering from an existing provider. In some cases, this has halved rates. This will have a significant impact on overall trends in the term market; more on this in our next issue.
Three new providers have entered the UK insurance market and have been added to our panel: Unilife who are based in Mauritius; Lombard International, who are based in Luxembourg, and Guardian 1821, a UK based insurer. All three insurers can cover UK risks and Unilife will also cover non-UK situs risks. Unilife and Lombard International will accept applications from non-UK residents.
As a result, coverage has been extended to include a broader range of countries, including Pakistan and Egypt. The following countries are not covered: Afghanistan, Iraq, Lebanon, Palestinian Territories, North Korea, Syria, Yemen, Guyana, Burundi, Central African Republic, Eritrea, Guinea, Guinea-Bissau, Liberia, Libya, Somalia, and South Sudan.
Overall capacity has now increased by approximately £40 million.
Zurich has temporarily left the International non-UK resident market due to a change in their platform. It is expected they will return in early spring.
AIG has launched its term product on a joint life second death basis, with attractive rates. AIG has also developed a whole of life insurance product with a care component of £400,000, where they will pay out 75% of the sum assured if care is required, or 100% on death.
The Insurance Distribution Directive (IDD) which replaced the Insurance Mediation Directive is due to take effect on 1 October 2018. The IDD will bring in additional protections for consumers and higher standards for distributors of insurance products, including more emphasis on the knowledge and competence of individuals and improving disclosure of information and conflicts to customers.
The IDD has removed the requirement for an introducer to be registered with the Financial Conduct Authority as an Introducer Appointed Representative, where introducers are only passing on the contact information of potential customers to insurance brokers. This means it is now easier to introduce business to John Lamb Insurance Broking.