According to Swiss Re income protection (IP) sales were down by 14.3% in 2007 and uptake of critical illness cover dropped by 8.2%.

Ross Ainslie, its head of actuarial, said: "The credit crunch has had an impact on the market as a fair chunk of protection sales are attached to mortgages. We think the entire UK protection sales market is down by about 10% to 15%. But it's a blip and customers will return."

It said this is because it is not overly dependent on selling to mortgage borrowers through independent financial advisers as it has a number of distribution channels, including its partnership with Barclays.