Torben Thomsen, chief pricing officer for life and health reinsurance at Swiss Re
Q: What do you think will be the most popular distributional channels for life insurance?
TT: I don’t think it’s possible to point to one specific channel, but what I think is face-to face sales will still be very important and that’s particularly for products that involve savings, pensions or tax planning.
Go deeper with GlobalData
Our research shows that the reputations of banks have suffered from the financial crisis so that might mean people are little more sceptical about buying [insurance] via a bank.
But actually what we also found out was that a lot of people would be comfortable taking out insurance sold or promoted by their employer.
Q: What role will technology play in life insurance by 2020?
TT: What we found was, actually quite surprisingly, that the most trusted sources for information about insurance is actually the internet for research.
We think that they will probably still be made aware of the need for insurance via other channels, but we think they will then actually go back home and find out more information on the internet and check that they get an appropriate product and a competitive price.
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By GlobalDataI think in terms of mobile technology people seem sceptical about buying insurance [from the mobile channel] definitely at the moment. Personally, I think that because pensions, [and] insurance is so often a big decision to make that people want to take the time to make that decision rather than doing it on the commute, and on the way to work.
Q: Do you expect the life insurance market to be more regulated by 2020?
TT: Yes, we are always seeing this. There is Sovlency II coming in and that will increase capital requirements for a lot of products. There’s also the EU gender directive [due to become effective from 21 December 2012] which prohibits companies from using gender differentiated pricing. So I think it’s safe to say there will be more regulation in 2020 than there is today.
Q: Do you think there will be more awareness about life insurance by 2020?
TT: I think there has to be more awareness, otherwise there is a risk. We think it is important that both the industry and also the government raise the awareness about insurance alternatives or additional insurance cover that can sit on top of minimal state benefits.
We also think that there needs to be more stability around what the state will actually provide. [This is because] we know there is a lot of confusion about what the state will provide. What we think people need to know is basically what they can rely on from the state and have some certainty that will stay in place for some time. [This would allow them] to make their own decisions about how to plan for the gap left by the state.
Jason Wellmann, senior vice president of life insurance sales for Allianz Life
Insurance Company of North America (Allianz Life)
Q: Will bancassurance become more important or will direct life insurance surge in importance by 2020?
JW: I think you will see direct life continue to grow, but also other distribution channels such as broker/dealers and banks, [will] start to really push life insurance.
Q: What role will technology play in life insurance?
JW: Technology will continue to play a significant role in the industry. Not just in the ease of doing business for the adviser or the consumer, but also [by enabling] the consumer to do research or due diligence on carriers.
Q: Do you expect the life insurance market to be more regulated by 2020?
JW: I do. Especially since one of the fastest growing segments within the life insurance industry has been cash value products.
There will also be increased regulation when brokers or dealers and banks start to sell the product. Consumers are looking at life insurance a lot differently than they have in the past. They are certainly interested in the death benefit that life insurance provides, but are also equally looking at the cash value opportunity and living benefits.
Q: How different will the product range be? what segment of the market will life insurers focus on particularly?
JW: I believe that product features will become more simplified going forward.
Q: In what way will factors such as an ageing population influence the future of the life insurance market?
JW: The ageing population is currently and will continue to influence and drive product design.
Q: Will life insurance be able to compete with other financial products?
JW: Life insurance is competing right now as an additional product in the financial planning process. We are seeing life insurance being used for additional purposes to the death benefit, including college funding or supplemental retirement income. This phenomenon will continue to evolve as the market evolves. Recently, product development with many carriers has been focused on cash value products.
Q: Will there be more awareness of life insurance, or is there a risk that there will be a significant proportion of the population without insurance?
JW: I believe the industry will continue to push for awareness – not just in life insurance, but also in annuities. Consumers are extremely concerned about retirement and you will continue to see companies address that with product development and enhancements.
Darren Spriggs, managing director at Ageas Protect
Q: What will be the most popular distributional channel for life insurance by 2020?
DS: We believe that IFAs will continue to be a significant and dominant channel for the sale of protection, and as a result this channel will continue to be the main focus of the Ageas Protect strategy in the UK.
Restricted advice models may become more prevalent due to the RDR, with some advisers choosing to go down that path instead of remaining independent.
Bancassurance models may benefit from RDR and will always be [a] significant distribution channel. The internet, which is currently the largest growing channel in the UK, will continue to grow as an important distribution channel in future [and take] a more prominent role.
Q: What role will technology play in life insurance by 2020?
DS: The internet will continue to grow as an important distribution channel in [the] future and new technology like tablet PCs are likely to have an effect on how business is written. As a result, the ability for the customer to ‘self-apply’ will exist online in the next few years. We see life insurance following the same path that we have seen in general insurance, but at a slower pace.
Q: Do you expect the market to be more regulated by 2020?
DS: Yes and in reality increased regulation is happening now. We are already seeing increased regulation of intermediaries. [There is also] Solvency II, [and] greater involvement from the regulators in product design and product distribution.
Q: How different are life insurance products likely to be by 2020? What segment of the market will life insurers focus on particularly?
DS: In terms of the IFA protection market place, the core products should remain the same. In terms of the direct protection business – simplified products may [be] introduced.
Q: Will life insurance be able to compete with other financial products?
DS: The s imple answer i s yes, but a s an industry we have to get our message across regarding the need for protection and educate customers about what protection an provisions are required.
Savings are useful to provide for the worst, but in our experience, consumers dramatically underestimate what is required in the event that the worst things happen. Savings may help in the short term but [they are] not the solution. Consumer education has to be an industry priority.
Q: Will there be more awareness of life insurance by 2020?
DS: The protection gap continues to grow as it has done over the last few years and will continue until simpler products and easier product distribution are in place. I subscribe to the philosophy that any protection is better than none and our challenge is to help people understand the importance [of that], take the first step on the ladder and then as their understanding grows, extend that protection to ensure it is appropriate for their needs.
Olivier Mariée, executive vice-president in charge of savings, Axa France
Q: The population is ageing in France. Do you think the public realise that state support is diminishing and are they beginning to plan accordingly?
OM: It’s very interesting because I believe that five or six years ago it wasn’t the case. When I look at long term care, we launched long term care products 20 years ago in France and sales were absolutely flat. Nothing happened.
When I look at what’s happening at the moment, sales are very fast. I think the sovereign debt crisis will have an impact on customers.
They understand that at the end of the day they will have to take care of themselves, of their retirement, and of long term care.
I think especially in France [in the past] everyone thought ‘Well, I have no issue regarding retirement, long term care and insurance security’. I think there is now this understanding that this is not something that will stay forever.
Q: Do you expect more regulation affecting life insurance by 2020?
OM: Unfortunately I don’t think it will stop. We want more transparency, more information, and we want to make sure customers are really in a position, so that they are really able to understand what they buy. On the other hand we see that sophistication is really increasing. I don’t think regulation will slow down. I think it is something that is really increasing. I think we should also be cautious, because we have to make sure that regulations are always helping customers.
