Key Trends in UK Life Insurance

by Catherine Stagg-Macey, October 14, 2009
Industry Trends


The £69 billion UK life insurance market faces declining demand for life insurance products along with an increasing lapse rate as personal disposable income comes under pressure. An aging population and regulatory pressure are among the drivers of change in the industry.

In a new report, Key Trends in the UK Life Insurance Market, Celent discusses the changes in the UK life insurance market and poses some considerations for IT strategists. Impending regulation is likely to alter the number of players in each distribution channel, but the overall map of players is likely to remain the same.

There are four key areas of change in the market that will impact the nature of the market in the future. The issues are around the Financial Services Authority’s Retail Distribution Review, the needs of an ageing population, and the desire for consumers to buy insurance online. Each of these issues raises questions about the agility and flexibility of the IT operation’s response. The continued fragmentation of the insurance value chain also raises questions for insurers as to how much of the distribution they would want to own or control.

"CIOs are battling with legacy systems, constraints on accessing customer data, and integration issues,” says Catherine Stagg-Macey, senior analyst with Celent's Insurance Group and author of the report. "As they look to unravel these, they should keep a eye on business trends and know how they might impact their business."

This report looks at the drivers in some detail, and explores the considerations for CIOs. At the heart of all the trends is the CIO’s ability to respond quickly and appropriately. In order to do so, a flexible architecture must be in place. Few have this in place today, but most are somewhere on the long journey towards this goal.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary






The Impact of Regulation


Value Chain Fragmentation


The Emergence of Direct-to-Consumer Channel


The Journey Towards Technical Agility




Leveraging Celent’s Expertise


Related Celent Research


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