The Insurance Industry in the Financial Services Market

Abstract

A year ago I proposed that in the not too distant future there will not be a market for insurance products or for banking products, but rather an integrated market for ®nancial services. In the intervening period, the acceleration of many of the forces shaping this integrated market has reinforced my belief in the inevitability of this shift. This new market, commonly referred to today as bancassurance, has emerged as a major force in a number of European countries. A con uence of evolving customer needs and enhanced provider capabilities will extend both the penetration and scope of products in the Bancassurance formula. I believe the surge of M&A activity of the last 12 months involving insurers and banks is largely driven by the perceived requirement to build provider capabilities to meet latent customer needs. I also continue to believe that the executional requirements for winning in this new game will be high. Those of us currently delivering against the bancassurance formula see the challenge of matching the best product specialists in each of our traditional business lines. But the players who can successfully manage the complexity will be rewarded. To support that belief, I will review brie y the main forces at work in the European ®nancial services market and then consider how these might affect competitors in the future in terms of their strategies, their products, their access to customers, their risk pro®les and their executional capabilities. Finally I will conclude with a brief summary of the implications for today's insurance competitors.