The individual critical illness market is rocketing, with nearly 100,000 more policies sold in 1999 than the previous year, Swiss Re's annual market trends report shows.
The report shows 783,166 policies were sold in 1999 compared to 694,263 in 1998, a 12.8% jump.
Swiss Re Life & Health technical manager Ray Wheatcroft attributed the boom to changing public perception. He said: "Increasing consumer awareness of the need for self-provision and to provide income replacement is now being reflected in sales figures. There is a clear challenge here for product providers to extend their repertoire."
CGU has topped the league for selling individual new critical illness policies. The composite sold 89,910 new policies, moving up the league table from ninth place. In second was Legal & General which sold 86,271 new policies. However, Wheatcroft warned that the market is extremely dependent on the mortgage market and as such could easily experience a slump.
He said: "Again, this year's growth is linked to the buoyant mortgage market and there is concern that a downturn in mortgage-related business will result in a fall in new health protection sales."
The Swiss Re report also looks at the income protection market where new policy sales also jumped by 33,000. The figure for new policies in 1999 was 189,244 compared to 156,424. Income from new policy sales was up by 21% to £190m.
Wheatcroft said: "The UK critical illness and income protection markets are becoming increasingly sophisticated and the impact of medical advances will call for a sharpening of risk management and pricing skills."