PDF《Pure Protection Contracts》

Pure Protection Contracts Product Sales Data (PSD) Trends Report September

2008 Contents Pure Protection Contracts Product Sales Data (PSD) Trends Report September

2008 1.

Highlights

2 2. What is product sales data?

3 3. What information is available from pure protection

5 contracts PSD? 4. General trends

6 5. Top five provider firms

7 6. Analysis of selling firms category

8 7. Selling firms total sales distribution

9 8. Advice and payment method analysis

10 9. Appendix

11 All figures relate to reported pure protection contract sales transacted between

1 April

2007 and

31 March 2008, unless stated otherwise. 1. Highlights

2 Pure Protection Contracts Product Sales Data Trends Report Sales Over 668,000 pure protection contracts were sold between April

2007 and March 2008, representing a fall of 20% on the previous year (2006/07 C 833,000). Sales of Standalone Critical Illness products fell by 49% from 86,000 in 2006/07 to 44,000 in 2007/08. 72% of all pure protection contract sales reported on PSD were Critical Illness Sold as a Rider Benefit (2006/07 C 72%). 52% of Critical Illness Sold as a Rider Benefit contracts were provided by the top five firms (2006/07 C 58%). Selling Channels 61% of all Pure Protection contracts were sold through financial advisers and brokers (2006/07 C 56%). Advice 93% of all pure protection contracts were sold on an advised basis (2006/07 C 86%). Premium 95% of all pure protection contracts were sold as regular premium products (2006/07 C 97%). Since

1 April 2005, product providers have been required to provide the FSA with transaction level data on all sales of regulated mortgage contracts, retail investment products and certain pure protection products to retail and private customers. This covers direct sales by firms'

own sales forces and sales made by intermediaries. Between April

2007 and March

2008 approximately

520 firms provided PSD reports, with around

180 reporting mortgages,

330 reporting retail investment products and

45 reporting pure protection products. Some firms report on more than one product area. Reporting firms are required to submit PSD reports quarterly. By

31 March

2008 we had received PSD for

12 calendar quarters, covering over

18 million transactions. PSD provides an important source of information that aids our risk-based supervision strategy in relation to retail firms and markets. The nature of the data means we can use it both at the detailed level to identify individual sales by firms and also at the aggregate level to monitor product and market sales patterns. Examples of how we make use of PSD include the following: ? In the course of our supervision of individual firms (both providers and intermediaries) we can identify the sales of a particular product or products by a firm. This helps to provide us with an insight into the business and how it is transacted. ? By analysing transactions reported in PSD, or comparing them with other data sources, we can identify potential risks arising from firms. For example, PSD is one of the sources of data used by our risk profiling tool, which generates alerts and risk indicators for firms and is a key element of our supervisory strategy, particularly in relation to small firms. In combination with other data, we have also been able to use PSD to help identify suspicious or fraudulent transactions conducted through firms. ? Aggregate data derived from PSD helps us in our thematic supervision work, such as to spot trends in the market, sales patterns and regional differences. It helps us to identify which firms to include in thematic reviews as it tells us which firms are active in each market. PSD also contributes to our strategic policy work, such as in aiding our understanding of distribution channels of products. Please note the following points. 1. This report focuses on the volume of transactions, not the value. 2. To make our analysis clearer, all data reported under the '