21st December 2012 will see the end of gender specific rates for life cover, critical illness and income protection. Gender neutral pricing will be UK Law from that date when the gender directive is implemented. This will obviously have quite an effect on premiums for new policies.
Also, on the 1st January 2013, an accounting principle that describes how protection term business may be taxed for providers of both investment and protection term business will end. Using this accounting principle gives the life insurer tax savings, some of which are used to decrease clients premiums, that are not available under the alternative ‘profits taxed’ basis which is used by providers without an investment book.
Industry commentators have suggested that this change in taxation approach when combined with the gender directive changes could result in pure protection premium rates rising by between 10 – 15%.