UK Life Insurers Will Only Thrive if They Transform to Offer a Broad Retirement Franchise
April 22, 2018
LONDON, 23 April 2018 – UK life insurers have the potential to add £7.5BN of annual cash generation to their industry and £100BN of shareholder value by 2021, but need to be bold and move beyond pensions to provide a range of financial and older age services. This is according to The Retirement Franchise Opportunity by global management consultancy Oliver Wyman, which reveals how the industry can offer a broader retirement franchise, or ‘Financial Home’.
The report encourages life insurers to make the most of an environment where auto-enrolment, the decline of defined benefit pensions and the ‘Pension Freedom’ reforms have increased the need for retirement advice or guidance. To capture this opportunity, however, they must transform their business models to extend beyond the sources of revenue they now capture.
John Whitworth, Oliver Wyman partner and lead author, says: “Life insurers must shift from their current narrow product focus to a client relationship-based proposition. In doing so, they have the potential to build client relationships that are stronger than those with retail banks, becoming the ‘Financial Home’ for the over 50s.”
The report recommends a significant investment in technological advances – such as digital channels, data analytics and robo-advisory services – to broaden and deepen client relationships, reduce costs of serving clients and generate greater profits.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across nearly 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 4,700 professionals around the world who help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.