DLP direct business overtakes IFA sales for first time

Individual life cover sold direct-to-consumers (D2C) has overtaken sales of the product via intermediaries at Direct Life & Pensions (DLP) for the first time.

In the last 18 months, more customers bought term assurance online via the firm's non-advised Direct Life site than through an intermediary after advice, says head of new business Phil Jeynes.

The shift is "completely led by price" he says, but warns online brands are maturing.

"Though they are likely to be of lower overall value, a higher number of individual sales points to online brands getting stronger. Life companies are realising they can make a crossover from the general insurance side as people are already comfortable trading this way for home, pet and car cover.

However, he says the rise is proof there is still business available, and he urges advisers to "get a grip" on the idea of competing with the D2C channel.

"Advisers should be able to compete if they can show advice is needed and to do this they need to be offering more than just straight term assurance.

"It won't necessarily be easy but advisers can show the many advantages to using them for products such as critical illness (CI) and income protection (IP), beyond just price."

IFAs must get in touch with customers and pick up on protection sales when doing investment work for clients, says Jeynes. "Otherwise we will see more customers migrating to the internet."

However, ABI assistant director, health and protection, Nick Kirwan, says it is important consumers are offered choice.

"Different people will be buying different products in different ways. In every other area, online sales are increasing. It would be strange if this wasn't the case for protection."

He adds: "Advisers can still compete, even on simple term assurance, on things like standard children's cover and a waiver of premium, extras you can't get online."