UK life premiums will grow by almost £30bn over the next four years, according to figures from EY’s ITEM club.
The growth would represent an increase of 16 per cent on 2015’s predicted total of £170.9bn, and bring the UK industry to £197.6bn.
EY says that growth of 3.8 per cent in 2014 will slowly drop, hitting 3.4 per cent by 2016 before recovering to 3.8 per cent in 2018 and reaching 4 per cent in 2019.
By contrast, the French life market is expected to see 4 per cent growth in 2015, while the forecast for Germany is 3.4 per cent.
EY’s UK head of insurance Mark Robertson says: “Having made good progress to grow their business in the aftermath of the financial crisis, when life premiums plummeted from their 2008 peak of £268bn to £154bn in 2010, UK insurers have been challenged by recent changes to the retirement market.
“As they battle hard to retain their dominant position in the life savings space, it is not surprising that premiums are set to slow after their recent growth spurt.
“The freedoms will mean a shift away from traditional retirement products to alternative investment vehicles, such as Isa-style provisions and property, which will certainly affect the growth of premiums. But there might also be more of a case for life bonds, if insurers can meet today’s demands for greater transparency and lower fees.”