The Collapse of the Middle for Corporate Pensions Providers in Europe

Although the Western European life and pensions industry is widely seen as ex-growth, there are exceptional segments which offer strong long-term growth, even in the most mature markets.  We believe that corporate pensions is one of these, representing one of the only true sources of real long-term "new money" growth for European insurers and asset managers.

In this Oliver Wyman perspective, The Collapse of the Middle: Opportunities and Threats for Corporate Pensions Providers in Europe, we discuss the underlying drivers of growth in the corporate pensions segment and the challenge faced by mid-tier providers that wish to capitalize on the opportunities provided by a shift in corporate pensions systems across Europe, in which defined contribution will be a particular hotspot.  Succeeding with existing business models will not be easy as we believe the corporate benefits market is already polarizing rapidly into two structurally different markets with utterly different dynamics and success factors - a high volume platform market and a gold standard market.

It may no longer be possible for pension providers (whether asset managers or insurers) to serve both of these markets with a single model and providers will need to choose which end of the market they are really targeting, and design their operating model to fit - or exit altogether.

Authors
Arthur White, Partner in the EMEA Insurance Practice
John Whitworth Partner in the EMEA Insurance Practice

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