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UK Bancassurance: Bank Distribution of Life and General Insurance 2011

Datamonitor
December 16, 2011
62 Pages - SKU: DFMN6745183

Abstract Table of Contents Related Reports

Countries covered: United Kingdom

Introduction

Bancassurers are facing major decisions in terms of reacting to an increasingly changing regulatory environment and choosing the best bancassurance model from the extremes of ""pure distribution"" to ""manufacture and underwrite.""

Features and benefits

Access comprehensive analysis and strategic action points for the UK bancassurance market to drive future innovation.
Plan your strategy effectively by having primary consumer insight to consumer attitudes towards using banks when seeking financial advice.
Identify the threats to your bancassurance model from non-traditional channels.

Highlights

Datamonitor's Financial Services Consumer Insight (FSCI) Survey 2011 highlights how UK consumers typically ignore bancassurers and instead utilize intermediaries or go direct through a life or general insurance provider when taking out a policy.

Consumers use their primary bank when seeking financial advice, and intend to utilize this channel for their future financial advice requirements. However, Datamonitor's FSCI 2011 Survey reveals that banks suffer from a distinct lack of cross-selling abilities.

Your key questions answered

Will bancassurers take away market share from IFAs in the distribution of protection products over the next five years?
Which bank is more successful than its peers at cross-selling insurance products to their primary account holders?
What proportion of UK consumers intend to use their primary bank when seeking financial advice in the future?
What strategic action can be taken to address the problems posed by capital constraints through regulation for retail banks?

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Executive Summary: Bancassurance is a consistently stronger channel in life than in non-life; There is an increased regulatory focus on the sector but it will provide the competitive advantage in the long-term; Consumers neglect bancassurers when taking out insurance policies, but intend to use their primary banks to seek financial advice in the future; There is no single model for bancassurance, with the options ranging from a pure distribution agreement to an insurance subsidiary wholly owned by the bank; A winning bancassurance formula hinges on essential operational components, customer-centric approaches, and effective cross-selling
OVERVIEW: Catalyst; Summary
MARKET CONTEXT: Introduction; Bancassurers have not been able to take market share aware from independent financial advisors in the distribution of protection; The distribution of general insurance products is focused through brokers and direct from providers; The increased regulatory focus will be a short-term challenge but potentially a long-term source of competitive advantage; Bancassurers face a capital challenge and changes to risk appetite from the Basel III and Solvency II regulations; Datamonitor forecasts that the bancassurance channel will maintain its market share for the distribution of protection; Forecasts for non-life distribution show that bancassurance will remain competitive in the household insurance space
CONSUMERS' RELATIONSHIP WITH BANCASSURERS: Introduction; Consumer holding of personal insurance varies across products lines; Consumers neglect bancassurers, instead utilizing intermediaries or going direct with providers when taking out insurance policies; Datamonitor's FSCI Survey highlights banks' lack of cross-selling success; Consumers use their primary bank when seeking financial advice, and will continue doing so in the future
COMPETITOR DYNAMICS: Introduction; Current relationships with insurers show that there is no single model for bancassurance; Bancassurers have started reacting strategically in response to pressure from the Retail Distribution Review; Aggregators have differing impacts for bancassurers that manufacture their own products and for those with joint venture models; The emergence of non-traditional insurance distribution models poses a threat to bancassurance
STRATEGIC ACTION POINTS: Introduction; Bancassurers have a ready pool of clients from the advice vacuum left by independent financial advisors shifting their focus upmarket due to the Retail Distribution Review; Bancassurers have key areas where particular differentiation can be achieved for consumers; A winning bancassurance model requires banks and insurers to assess key components of the operation; Bancassurers must take advantage of cross-selling opportunities within their existing customer base; Bancassurers have three options to address the problems posed by capital constraints through regulation
APPENDIX: Supplementary data; Definitions; Further reading; Ask the analyst; Disclaimer

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UK Bancassurance: Bank Distribution of Life and General Insurance 2011

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