The fiercest competition of the future may not come from other be traditional insurance players but players such as banks boasting greater brand recognition, large amounts of data and established trust with consumers.
At the IIS Conference yesterday (Tuesday June 24), Stephen Pendry, senior director of the financial services industry at Salesforce, explained that banks were a top threat because, “they have a known customer base and are already able to offer the one stop shop for financial services”.
PwC research at the conference showed that a majority of people would be willing to buy insurance policies from banks if they were able to get a better deal. Pendry also raised concerns that data led technology will enable new entrants to enter into the market as barriers to entry are far lower than previously.
David Law, global insurance leader at PwC, said that current distribution channels are resistant to change because of existing methodologies. “My own view is that it’s not necessarily about wanting to limit but more about having the ability to change,” he said.
Paul Jardine, chief operating office at Catlin, said he sees the threat as being largely distribution focused and added that insurers were faced with the challenge of morphing business models to provide for a very different range of clients.
He also added that brand image is vital for insurers: “It’s what you stand for as a business. Increasingly we’re seeing a real demand on what are you doing on environmental issues, social issues etc. It’s about building brands that are recognised.”
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IIS, Stephen Pendry, PwC, David Law, Paul Jardine, Europe