For your convenience, this section is divided into two:

	Vital statistics - critical illnesses
	Vital statistics - financial health
	Click on one of the headings above to go to that section.

Vital Statistics - Critical Illnesses

The Prevalence of Critical Illness

Advances in medical technology mean that life-prolonging cures and operations are becoming increasingly available. Whilst there has been little increase in the incidence of Critical Illness (the number of people who get a Critical Illness in a given time period), many more people are now surviving these conditions - so the prevalence of Critical Illness (the number of people with a Critical Illness at a given time) has increased.

Regrettably, however, it is clear that, for a large proportion of those who do survive a Critical Illness, a certain degree of disability will result. This affects the individual's ability to pursue their normal activities, including, of course, their ability to work.

The following statistics indicate the fundamental need for Critical Illness cover in the UK - a need which is illustrated by the strong growth in Critical Illness Insurance policy numbers over recent years and which looks set to continue into the foreseeable future.

All statistics relate to the United Kingdom.

Source: Munich Re (2002)

Alzheimer's Disease and other Dementias

	There are now over 700,000 people with Dementia.
	By the year 2010, if the current rate of growth continues, this figure will rise to 850,000. (Alzheimer's Society, 2002)

Arthritis & Rheumatism

	8 million people are currently affected by arthritis or rheumatic disease - of these, more than 3 million have a significant disability.
	Osteoarthritis is the most common joint disorder, affecting more than 1 million people.
	Around 350,000 people have rheumatoid arthritis. (Arthritis Research Campaign, 2002)

Brain & Spinal Injury

	Approximately 8,500 people in the UK suffer a Brain Haemorrhage each year, with 3 or 4 out of 10 patients being left with long-term problems.
	Each year in the UK there are 500 new cases of primary brain tumour (where a tumour starts in the brain, rather than spreads to the brain from another location).
	1 million people are treated in hospital for head injuries each year.
	9 out of every 20 victims with severe head injury will not return to work.
	In total, an estimated 3 million people in the UK are currently suffering from brain-related disorders. (BASIC, 2002)

Blindness

	In total, over 1 million people are visually impaired (ie registerable).
	Of these, 194,000 are registered as blind and 160,000 as partially sighted. (Office of National Statistics, 2002 - figures as at 31 March 1997)

Cancer

	1 in 3 people will be diagnosed with cancer at some point during their lifetime.
	1 in 4 people will die from cancer.
	Out of more than 200 different types of cancer, 4 - lung, breast, colorectal and prostate - account for over half of all new cases. (Non-melanoma skin cancer is excluded from these figures.) (Cancer Research UK, 2002)
	A quarter of a million people in the UK will contract cancer this year.
	More than half the people who contract cancer of the breast, cervix, larynx, testis, uterus, or malignant melanoma, will survive for a minimum of 5 years.
	Survival rates for many other cancers are also improving. (Munich Re, 2002)
	It is estimated that 1 woman in 9 will develop breast cancer at some point in her life.
	In 1997 38,000 women were newly diagnosed with breast cancer - and new cases are steadily increasing year on year.
	On average 60% of women diagnosed with breast cancer will still be alive 5 years later. (Breast Cancer Campaign, 2002)
	In 2000, over 150,000 people died from cancer. That's one person every 3 and a half minutes.
	In 2000, more men and women died from lung cancer than any other type of cancer - 20,600 men and 13,000 women. That's almost 100 deaths every day. (Office for National Statistics, 2001)

Coronary Heart Disease

	Every year there are an estimated 280,000 heart attacks in the UK - that's one every 2 minutes.
	Less than half of those who have a heart attack die within 28 days.
	Coronary Heart Disease is the most common cause of premature death.
	About 28,000 coronary artery by-pass grafts are carried out each year - a 5-fold increase since 1980.
	The number of coronary angioplasties has also increased, with 14,000 now being carried out annually.
	Around 2.6 million people are currently suffering from coronary heart disease. (British Heart Foundation, 2002)
	In 2000, over 120,000 people died from coronary heart disease. That's around 330 deaths every day. (Office for National Statistics, 2001)
	Studies have indicated that two-thirds of men suffering their first heart attack will survive for a minimum of 5 years. (Munich Re, 2002)

Deafness

	In total, over 8 million people are deaf or hard of hearing.
	Of these, 673,000 are severely or profoundly deaf, relying on lipreading and requiring a textphone or video phone. (RNID, 2002)

HIV / AIDS

	By the end of 2001, more than 48,000 people had been diagnosed HIV-positive.
	Over the same period, over 12,000 had died with AIDS.
	In addition, it is estimated that there are currently more than 11,000 people living with HIV - unaware of being HIV-positive.
	While the number of people dying from AIDS is falling (due to the widespread introduction of 'combination therapy' in 1996), the number of people living with HIV is set to increase by 47% between 2000 and 2005. (Terrence Higgins Trust, 2002)

Kidney Failure

	At the end of 1998, over 31,000 patients were suffering from end-stage renal failure.
	About half of these received transplants, while the remainder were treated with dialysis. (UK Renal Registry, 1999)

Multiple Sclerosis

	There are currently approximately 85,000 people with MS.
	Each year, around 2,500 individuals are newly diagnosed.
	MS is the most common neurological disorder among young adults.
	People are usually diagnosed between the ages of 20 and 40, but can be older. (Multiple Sclerosis Society, 2002)

Parkinson's Disease

	There are more than 120,000 people who have Parkinson's - that's 1 in every 500 people - and this figure is rising.
	Around 10,000 people are diagnosed with Parkinson's each year.
	Most people are diagnosed over the age of 60, but it is estimated that 1 in 20 people with Parkinson's are under age 40 when diagnosed and 1 in 7 are under 50. (Parkinson's Disease Society, 2002)

Stroke

	Each year about 100,000 people in this country suffer a first stroke -10,000 of these are under retirement age.
	Of those people who have a stroke, around one third die within a year, one third are left with serious disabilities and one third make a good recovery.
	Stroke is the largest single cause of severe disability, with 300,000 people being affected at any one time. (The Stroke Association, 2002)
	In 2000, over 60,000 deaths were due to stroke. That's over 160 people dying every day. (Office for National Statistics, 2001)

And finally…

All of the above statistics present an alarming picture of the prevalence of individual illnesses and support the ever growing need for Critical Illness Cover. This need is summed up in Munich Re's (2002) finding that 1 in 4 men and 1 in 5 women will contract one of the illnesses covered by a standard Critical Illness product before they reach age 65.
Source: Munich Re (2002)

IN GRATITUDE
The information contained in this section has been mainly supplied by Munich Re, a leading reinsurer, and a number of leading charities who know, only too well, of the financial effects of contracting a serious illness (find out more from their websites in Charities and support links).

Vital Statistics - Financial Health

The Need for Financial Health through Critical Illness Cover

If you still need convincing, click here. Otherwise, rest assured that more and more people in the UK recognise the need for Critical Illness Cover - and have taken out this type of insurance policy, as the figures below illustrate.

Source: Munich Re and Swiss Re (2002)

Market Statistics

During the course of 2001, 872,184 new individual Critical Illness policies were sold, an increase of almost 12% on the previous year. This phenomenal growth saw Critical Illness policies increasing their share of individual regular premium policy sales to 34.4%, compared with under 14.7% in 2000. As a result there were around 4 million policies in force as at the end of 2001.

Direct sales forces and appointed representatives (tied agents) accounted for just over 51% of new sales, down from almost 70% in 1995. IFAs increased their share of new policies to 46% - up from 31% in 1995. That's a 350% increase in new policies sold over this period, from around 90,000 in 1995 to over 400,000 in 2001. Interestingly, only 342 Critical Illness policies were sold via the Internet in 2001.

Average sum assured for 2001 was £67,868 for all sales (£65,789 in 2000). For direct sales forces and appointed representatives, the average sum assured was just over £62,000 - lower than the average, due to high proportions of mortgage-related business (typically lower sums assured). The average sum assured for IFA sales was £75,356.

Claims

Approximately half of reported claims are due to cancer, and a fifth due to heart attack. Of the remainder, stroke and multiple sclerosis are the principal causes. The last few years have seen a dramatic increase in claims due to multiple sclerosis, although this is distorted by the fact that multiple sclerosis is a relatively recent addition to most policies. For males, claims peak in the age range 41 - 50 and for females claims peak below age 40.

Market Place

Although Critical Illness policies have been a relative success, an 'in force' total of 4 million means that much of the market is as yet untapped. In fact just 14% of the working population and 6.5% of the total population have any form of Critical Illness cover.

Despite recent difficulties in the life assurance industry, Critical Illness continues to grow as the economy strengthens. It is clear that protection products are the main market for life insurers, as shown by the increase in market share of Critical Illness. However, average sums assured for smokers are 20% less than for non- smokers which suggests that consumers are driven by premiums they can afford to pay rather than the level of protection they require. This suggests that Critical Illness is still seen as a luxury rather than a necessity. One possible exception to this is the mortgage market.

New Business

Despite the increased availability of stand-alone products in the market place, the proportion sold has fallen in recent years. Stand-alone policies accounted for 17% of CI sales in 2001 - so, for every stand-alone policy, 5 accelerated Critical Illness policies were sold. The explanation for this is the resurgence in the housing market and hence increased sales of mortgage-related policies with an accelerated Critical Illness rider.

Mortgage-related sales continue to be one of the most successful areas for Critical Illness. The growth of this sector meant that, in 2001, almost 58% of total new individual Critical Illness plans were mortgage-related. In fact, around half of all new mortgage-related endowment and term policies were sold with an accelerated Critical Illness rider. IFAs have been a significant part of the switch from endowment to term assurance with Critical Illness cover.

'Best Practice' Guidelines

In April 1999, the Association of British Insurers (ABI) published its first Statement of Best Practice for Critical Illness Cover - in response to calls from within the insurance industry (in particular, certain leading IFAs) as well as from consumer organisations.

The Statement aims to help consumers understand and compare Critical Illness policies by setting a minimum standard for:

	the description of cover in Key Features documents
	the use of generic terms (eg 'permanent', 'survival period', etc.)
	the use of model wordings for Core Conditions (7 critical illnesses), Additional Conditions (13 critical illnesses) and Exclusions.

The Statement is reviewed in full every 3 years, to ensure that changes in market practice, legislation and medical science are incorporated. The most recent review was May 2002, with insurers required to adopt the revisions before June 2003.

New Features

The ABI Statement of Best Practice has had a positive impact on the market for Individual Critical Illness Cover, especially in terms of opening up the IFA distribution channel. Its impact on competition within this market has been to increase the need to differentiate. (Against a background of rationalisation in financial services generally, the number of providers has stabilised.)

So, rather than simply increasing the number of medical conditions covered, many companies are looking to new features as a way of 'adding value'. These features fall into 5 broad groupings:

	improvements to the ABI minimum standard wordings - eg less restrictive wordings for Core and Additional Conditions, fewer Exclusions, etc;
	product add-ons, often clearly focused on consumer needs at the point of claim - eg Best Doctors (a service to locate the most appropriate specialist for rare or complex medical conditions) and counselling helplines;
	flexible 'lifestyle' or 'cafeteria' plans, where a range of protection policies - including Critical Illness - can be developed to meet individual needs during each life stage.
	specific product features, designed to meet different consumer needs and often allowing a more competitive pricing structure - eg automatic 'buy-back' of limited Critical Illness or Life cover following a Critical Illness claim, the option to have any claim paid as monthly income, or the choice between different levels of cover in terms of critical illnesses covered and even sum assured;
	more flexible and consumer-centred administration - eg streamlined underwriting, automatic acceptance up to certain sums assured, appropriate medical evidence above a certain level of sum assured only.

In fact, this is the guiding principle behind the Product Comparison area of this website
- helping IFAs to easily identify points of differentiation between providers.

Conditions Covered

There are now around 40 companies transacting individual Critical Illness business - offering around 130 different products.

The list of conditions covered has stabilised with the ABI Statement. Points to note are:

	Multiple Sclerosis has been added to the Core Conditions, which almost every company covers.
	The ABI's Additional Conditions cover a range of disabling events and illnesses - such as Paralysis, Blindness, Loss of Limbs, Motor Neurone Disease - as well as Terminal Illness. Many companies cover all of these except Terminal Illness, which they then offer in addition on accelerated policies (where there is less cost impact).
	As a result of media attention, conditions such as Creutzfeldt-Jakob Disease and Bacterial Meningitis have been added to many policies.
	Total Permanent Disability definition guidelines are also given by the ABI, which again has led to greater standardisation.

IN GRATITUDE

The statistical information contained in this section has been kindly supplied by leading reinsurers Munich Re and Swiss Re.