“Wary” insurers across the UK have temporarily withdrawn income protection products providing unemployment cover, according to recent findings from GlobalData.
The data group expects gross written premium (GWP) in this market to fall by 26.5% in 2020, following a period of “consistently strong growth”.
Nonetheless, it expects the market to “bounce back” in 2021, with predicted growth of 35.8%.
Beatriz Benito, senior insurance analyst at GlobalData, said: “Covid-19 is bound to increase unemployment, forcing many individuals to postpone plans for home purchases in the near future.
“However, it will also leave renters vulnerable to continue renting long-term. Purchasing a house is one of the main triggers for consumers to purchase an income protection policy, so this will be a key short-term factor.”
She added: “There was a surge in demand for income protection products at the outset of the pandemic as consumers became increasingly wary about their job security.
“Therefore, the decline in GWP has been largely due to the insurers and GlobalData expects consumer demand to remain high, which is why the company forecasts such strong growth for 2021 and expects insurers to reintroduce unemployment cover.”