More than half – 51% – of advisers who advise on income protection have predicted demand for this will rise in 2025, research from an insurer found.
According to a survey of financial advisers by The Exeter, this is higher than the 31% who said demand would stay flat compared to this year and the 18% who said demand would fall.
Among advisers who advise on life insurance, the largest share expected a rise in demand next year, as cited by 44%. Some 37% believed demand would be unchanged and 19% predicted a decline.
Two-fifths of health insurance advisers said demand for the product would increase in 2025, 32% said demand would be flat and 28% felt interest would fall.
Reasons for growing protection demand
Economic growth and more consumer spending capability were named as the most common reasons for a rise in demand for protection, as predicted by 18% of advisers.
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Some 17% said pressure on public health services would drive demand, while 14% suggested it would be influenced by technology and artificial intelligence (AI) in insurance propositions.
Just 9% of advisers said tax reductions, such as a drop in insurance premium tax, would create a rise in demand.
Advisers meeting heightened demand
The majority – 92% – of advisers surveyed said they were confident they would be able to cope with a rise in demand for insurance, with 42% of these saying they felt ‘very confident’.
Just 2% said they were not confident about meeting this demand at all.
Advisers were asked about what positive changes in the market could drive further business.
Some 39% said more consumer awareness around the need for health and financial insurance would create business over the next 12-24 months, while 32% suggested streamlined operations focusing on specialised advice.
Some 31% said continued pressure on health services would boost business.
Steve Bryan, distribution and marketing director at The Exeter, said: “It’s pleasing to see that advisers are confident about an increase in demand for insurance in the next 12 months. Just as pleasing is the overwhelming number of advisers who are confident of meeting this demand; something that insurers also need to be prepared for to enable clients to get the valuable cover they need as efficiently as possible.
“As we move through 2025 and beyond, it’s important that our industry continues to collaborate and makes the most of every opportunity that presents itself to increase awareness and uptake of protection and health insurance products.
“The outlook is hugely positive, and building on the momentum we have created in recent years is key to protecting more people from the impacts of ill health.”
Earlier this year, The Exeter said it saw a rise in the use of its health MOT service and remote GP appointments.
