Key Trends in UK Life Insurance
The £69 billion UK life insurance market faces declining demand for life insurance products along with an increasing lapse rate as personal disposable income comes under pressure. An aging population and regulatory pressure are among the drivers of change in the industry.
In a new report, Key Trends in the UK Life Insurance Market, Celent discusses the changes in the UK life insurance market and poses some considerations for IT strategists. Impending regulation is likely to alter the number of players in each distribution channel, but the overall map of players is likely to remain the same.
There are four key areas of change in the market that will impact the nature of the market in the future. The issues are around the Financial Services Authority’s Retail Distribution Review, the needs of an ageing population, and the desire for consumers to buy insurance online. Each of these issues raises questions about the agility and flexibility of the IT operation’s response. The continued fragmentation of the insurance value chain also raises questions for insurers as to how much of the distribution they would want to own or control.
"CIOs are battling with legacy systems, constraints on accessing customer data, and integration issues,” says Catherine Stagg-Macey, senior analyst with Celent's Insurance Group and author of the report. "As they look to unravel these, they should keep a eye on business trends and know how they might impact their business."
This report looks at the drivers in some detail, and explores the considerations for CIOs. At the heart of all the trends is the CIO’s ability to respond quickly and appropriately. In order to do so, a flexible architecture must be in place. Few have this in place today, but most are somewhere on the long journey towards this goal.