BUSINESS INSIGHTS

The Future of UK Insurance

Mapping the Internet into CRM Strategies

High
Commoditized eService Personalized eService
VoIP
Level of technological sophistication

Collaborative
browsing
eServices
Real-time Internet Online CRM
Intelligent agent text chat
aided e-mail
Automated e-mail

Traditionally impersonal Traditionally personal

Fax
Telephone
conversation
Offline CRM

Letter
Low Face-to-face

Low Customer/Agent Interactivity High

For insurers the Internet represents a powerful opportunity to
enhance interaction with their customers, but also heralds the
beginning of a dramatic period as eCommerce sweeps
change through the industry.

5 REASONS WHY YOU SHOULD BUY THIS REPORT TODAY

1 Discover which sectors of the insurance market will achieve the best growth rates

over the coming years

2 See which companies are demonstrating best practice in eCommerce
3 Learn how consumers are utilizing the Internet to access insurance services and how
this will evolve in the coming year
4 Discover how M&A activity will continue to shape the industry
5 See how will European Intergration will affect the insurance industry in the UK

PLUS MUCH MORE ...

UK Insurance

Insurance lags behind other financial The insurance industry in the UK is now facing a period of considerable
services sectors in eCommerce space change. Key themes are emerging to challenge the current industry
paradigms. Firstly, as with business in general, the Internet is providing
Many online users have searched, Many online users have searched,

40%
of which few have ordered
% of Internet users who have searched
of which few have ordered
new avenues to the customer. The insurance industry faces many hurdles
before it can provide a new economy solution for consumers. However,
Any

35% financial
services

those businesses which grasp the new technology, will have a significant
30%

25% Banking

20%
services
advantage in the coming years. Secondly, consolidation amongst the
General
Savings &
leading UK and European players is set to continue with scale offering
15% Insurance
Investment
10%

many advantages.
Life & Pensions Cards &
5% Payments
Loans & Credits
0%
0% 10% 20% 30% 40% 50% 60%
% of searched who ordered
Few online users have searched,
of which few have ordered
Few online users have searched,
of which many have ordered
UK Insurance by Business Insights is a one stop shop for the insurance
= Number of people who have ordered online
industry. It provides an analysis of current events and provides forecasts
up to 2005. A detailed analysis of the competitive environment is also
“Online banking services are now commonplace, provided, with the recent spate of mergers and acquisitions
while progress is needed to establish a powerful discussed and the competitive positioning of the leading players
insurance online presence. This will provide a identified. By utilizing this information the report is able to make
platform for banks to sell insurance within the predictions for the future competitive structures of the UK market and
eCommerce arena.”
also provide these in a European context.

Unrivalled research

Expect More Mergers as Consolidation UK Insurance draws upon a year-round programme of primary research
Drives Forward interviews with leading insurance executives in the UK on a wide range of
EUROLAND subjects connected with UK insurance.
UK
Acquire local expertise Analytical techniques:
The report is underpinned by extensive quantitative analysis, meaning that
BARRIERS TO ORGANIC
GROWTH assertions made are backed up by clear, numerical justification throughout.
Product diversity
Cultural Data is drawn from a variety of sources including consumer research,
Legal
in-house databases describing and quantifying the European insurance
market and company literature.

This latest study is based on:

CONTINENT

“Consolidation has been one of the key features • 150 telephone interviews with insurance executives in the UK who are
of the insurance industry in recent years. The industry experts involved in the personal, general, commercial and
conditions are still ripe for further consolidation in general insurance markets.
the UK insurance market.”

• Statistics are also drawn from the Association of British Insurers

providing reliable data and deep strategic insight to guide you into
the future.
How can you benefit from this report

1 Understand the impact of the Internet on the insurance industry and

Internet Insurance Market Drivers
identify best practice. This report will prove invaluable in assessing the
next steps in this fast changing environment.
• eCommerce regulation
• PC and Internet penetration
• IT infrastructure

2 Identify key consumer expectations and see how future investment in

ENVIRONMENT
• Threat of channel
conflict
• Potential for cost
savings
internet based services can be tailored to their specific needs, rather
INTERFAC E
than the needs of your technical department.
S UPPLY DEMAND

• Operational cost reduction

• Product complexity
• Consumers’ familiarity with products
3 Assess consolidation in the market by accessing a powerful analysis of
the results so far. Consider the next moves and the impact on the
• M arketing opportunities through standardisation
of customer data collection and warehousing

• Speed and convenience

• Freedom of movement between channels
• Demand for control over personal finances market.

4 Realize market opportunities by assessing detailed sectorial analysis

“From customer relationships to risk management allowing you to segment your portfolio and develop new products .
to channel distribution, the Internet impacts upon
the insurance industry. Grasping these 5 Analyse your competitors by sector enabling you to benchmark
opportunities will require significant investment yourselves against your competition and identify areas for future
and expertise from within and without.”
competitive enhancement.

We have the answers for you

New Players in the eInsurance Space • Which sectors of the insurance market will achieve the best growth
rates over the coming years?
Hybrid
Online direct
eCommerce/

•
offering
advisor based
Which companies are demonstrating best practice in eCommerce?
Breadth of customer relationship

Aigdirect
Broad
Ineas
• How are consumers utilizing the Internet to access insurance
Many insurance
providers are
services and how will this evolve in the coming year?
here

Ebix
Narrow
• How will M&A activity continue to shape the industry?
InsWeb
Progressive

Online only Face-to-face only • How will European Intergration affect the insurance industry in the
Delivery channel UK?

“While the insurance industry as a whole slowly • What lessons can the insurance industry learn from other financial
develops web strategies a number of smaller services sectors when addressing the opportunities offered by the
players have emerged online to provide a glimpse internet?
of the future.”

• What impact is regulation having on the industry?

Table of contents
EXECUTIVE SUMMARY
CHAPTER 1 INTRODUCTION
• Current UK legislation and regulation
• An uncertain regulatory future
• European Union legislation
CHAPTER 2 PERSONAL GENERAL INSURANCE
• Private motor shows premium growth while domestic
property suffers
• A&H is realising its potential for growth
• Little change in the distribution of PGI
• The emergence of "the big four"
• Opportunities outweigh threats for the big and the small
• Remote access will take off in the private motor market
CHAPTER 3 COMMERCIAL GENERAL INSURANCE
• General insurance market overview
• Underwriting losses mount in the general insurance market
• Analysis of the commercial market by segment
• Lloyd's has suffered alongside the general insurance market
CHAPTER 4 LIFE AND PENSIONS
• Introduction
• Relevant taxation and regulatory changes in the UK
• Market overview
• Competition in the UK life and pensions market
• Distribution channels
• Investment assets
CHAPTER 5 THE DRIVERS OF MERGER AND ACQUISITION
ACTIVITY
• Shareholder value
• The creation of shareholder value
• Policyholder value
• Economies of scale
• Broadening the scope of a company's activities
• Conclusion
CHAPTER 6 COMPETITOR ANALYSIS: GENERAL INSURANCE
• Merger and acquisition activity has created a top heavy
market: The emergence of "the big four"
• Performance ratio analysis
• Critical success factor ratings
• PGI market in comparison wth the total general market
• Total general insurance market
• Motor insurance market
• Property insurance
• Accident and health
CHAPTER 7 COMPETITOR ANALYSIS: LIFE AND PENSIONS
• Life & pensions earned premium data
• New business
• Expense ratios
• Competitor analysis of life business
• Competitor analysis of pensions business
CHAPTER 8 INSURANCE DISTRIBUTION
• Independent agents dominate insurance distribution
• Bancassurers still flatter to deceive
• The decline of the direct salesforce continues
• Tied agents retain market share
• Tele-insurers continue to increase market share
• Slow start for insurance industry in remote access
• Key Issues
• Forecasts
Table of contents

CHAPTER 9 INSURANCE AND THE INTERNET

• Interface
• Supply factors
• Demand factors
• The future

CHAPTER 10 CRITICAL SUCCESS FACTORS

• A winning strategy: summary

• Business model
• Product offering
• Branding
• Marketing
• Customer data management
• Customer service

CHAPTER 11 THE FUTURE OF eINSURANCE

• eSignature legislation
• WAP and insurance
• Convergence in the financial services industry
• Customer Relationship Management (CRM)
 About Business Insights
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