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ESMI Life and Critical Illness Cover closure

Journalist: Tom Dunstan, FTAdviser

ended 25. January 2024

It was recently announced that ESMI Life Cover and Life & Critical Illness Cover will no longer be open to new sales from 29 February 2024.

Additionally, the quoting platform site will close at 5pm on 29 February 2024 for new sales. The last start date that you’ll be able to choose will be 15 February 2024.

What is your reaction to this? What does this mean for the UK protection market?

6 responses from the Newspage community

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Darryl Dhoffer
Founder at The Mortgage Geezer
Existing policyholders might be worried about the future of their coverage or potentially facing difficulties managing their policies. Hopefully, ESMI have provided clear communication and reassurance regarding existing policies and claims processes. Other insurance providers might see this as an opportunity to fill the gap in the market by offering similar products with competitive features...we shall see. The withdrawal of a market player could indicate a changing landscape in the UK protection market, potentially prompting consolidation or product innovation - its difficult to predict the long-term impact on the market, without having specific reasons behind ESMI's decision.
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Simon Bridgland
Director at Charwin Private Clients
These types of cover serve a purpose in the marketplace as clients who are unable to obtain full life cover, critical illness cover or income protection were able to get something, which of course is better than nothing.
Unfortunately a lot of people have perhaps purchased this thinking it is the type of cover brokers refer to and arrange on a regular basis when it is not. Other policies similar to this are still available if needed, but this isn’t the cover you would want to have given the choice, because of this I cannot envisage much negative impact in the wider market.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Further reductions in providers in the protection space is sad to see and the market continues to consolidate. Ultimately less choice can lead to poorer client outcomes.
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Gary Bush
Financial Adviser at MortgageShop.com
Further to our recent comments on the limited amount of life insurance providers in the UK, since last year's amalgamation of Aegon, Canada Life, and AIG into other larger competitor insurers to see this morning's news on impaired life insurer ESMI closing down in Feb is another nail in the coffin for consumers. Although not a mainstream provider we have at times had no option than to use this insurer for customers who had tricky health conditions that the larger insurers weren't happy to cover. Over the last 3 decades, the range of insurers operating in in the country has often seen takeovers, mergers but this truly isn't good news when in such a short space of time we have now lost at least 4 brands of life insurers - leaving the market far less competitive than it has previously been. A worrying state of affairs that leaves the general public relying on independent advisers even more so now. It's understood that Isle of Man Assurance Limited has pulled the plug on ESMI's coverage.
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Robert Timm
Managing Director at Sunland Mortgages
Although I've never personally used ESMI, it's better for brokers and consumers to have more choice in the protection space. In the last year we've seen a number of personal protection providers exit the market, which is not good news.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
At a time with record NHS waiting lists you'd think non medically underwritten policy providers would be thriving so it must come down to the distrubution model. Most people buy from a human that they trust, often a broker, and most brokers would have a swathe of clients that they were unable to otherwise protect who could have benefitted from this sort of product.