Last week, I discussed the trends, challenges and opportunities in the UK life insurance industry. Specifically, I talked about the relatively low market penetration of bancassurance, and the opportunities for expansion into this market.
If you haven’t already, read part one of this series.
If bancassurance is to be as successful in the United Kingdom as it is in the rest of Europe, I see five key capabilities that insurers must develop.
Rich customer insight
Accenture’s research shows that younger customers are the most likely to view the bank as their preferred financial advisor, and that they are willing to pay a premium for personalized service. This is just one example of customer behavior that banks must understand in order to match products with customers and channels. Banks have access to rich information about their customers, their income and their spending habits; it’s a matter of leveraging that information to identify sales opportunities.
Multichannel sales distribution
Banks have an opportunity in that they have physical, bricks-and-mortar presence. By leveraging this presence, they can expand into other distribution channels—namely Internet and mobile channels. The Internet has been an effective channel for general insurers (particularly motor and home insurers) and could be an excellent fit for simpler life insurance products.
Simple products and simplified advice
Product complexity limits automation and creates excess administration expenses. By adopting menu-driven and rules-based approaches, insurers can segment customers earlier in the application process and match customers to appropriate products.
Slick sales processes
In a highly competitive environment, time is important. In the time it takes one insurer to request more information or gather referrals, a customer can take their business elsewhere. Automated, industrialized sales processes reduce costly delays, streamline the application process and stop profitable customers from taking their business elsewhere.
Product platforms must be able to accommodate the switch to simpler products and automated processing. Selling high volumes of simpler products requires a different platform than what is typically used right now: platforms that work well for low volumes of complex products. While the transition may seem daunting, the simplicity and agility afforded by a streamlined operating system can enable high performance.
Together, these five capabilities can position insurers to expand bancassurance in the United Kingdom and capitalize on an upcoming market opportunity.
Accenture has developed a Point of View on this topic. Download How Bancassurance Can Dominate the UK Life Insurance Industry.