Top Trends in UK Distribution: The General Insurance View

by Catherine Stagg-Macey, October 17, 2008


London, United Kingdom 17 October 2008

Top Trends in UK Distribution: A General Insurance View

Distribution of insurance products continues to evolve, is diverse, and favors low-cost channels.

The distribution landscape looks very different since the advent of the direct channel. This transition continues to develop, with the UK market experiencing shifts in sales to new channels, such as aggregators and affinity partnerships. In a new report, Top Trends in UK Distribution: A General Insurance View, Celent discusses the changes in this landscape and poses some considerations for IT strategists.

Today, major insurers in the UK use an array of distribution channels. In the personal lines sector, the dominant channels are direct (30%) and the independent intermediary (32%). Independent intermediaries dominate the commercial insurance sector, with 83% of insurance being sold in this channel in 2006. The United Kingdom has the highest usage of direct channels across Europe, which is still largely dominated by face-to-face interactions.

"The UK market is in a mature development stage, with low-cost channels and new channels, such as aggregators and affinity, becoming increasingly active. This is driven from both the sell side...insurers trying to adopt lean business models in order to compete...and the buy-side, with increasing customer demand for flexibility in buying insurance products," says Catherine Stagg-Macey, senior analyst with Celent’s Insurance group and author of the report.

The persistent message from CIOs is that their IT investments in the distribution channel are focused on ease of doing business. This could translate into several very different projects, such as a revised customer portal with improved functionality or navigation, or an online commissions system for agents and brokers.

Changes in distribution have a varied impact on insurers. Each insurer will have its own challenges to address in focusing on its distribution strategy. There is no "one size fits all" approach. The objective of this report is to provide an update on trends in distribution, the general insurance market, and key technologies that can be used to support these trends.

The 36-page report contains eight figures and five tables. A table of contents is available online.

of Celent's Property/Casualty Insurance research service can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.  

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

London, United Kingdom 17 October 2008

Top Trends in UK Distribution:  The General Insurance View

Executive Summary 3
Introduction 4
Key Trends 8
Anywhere, Anytime 10
Increased Consumer Buying Power 12
The Direct Insurer Stands Firm 16
Affinity Channels Continue to Grow 18
The Mid-Market Attracts Attention 20
Disintermediation Is Alive and Well 22
Strategies for a Competitive Edge 23
Key Technologies for Distribution 25
Investment Prioritisation 31
Conclusion 33


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