Life companies'-commerce strategies have failed to deliver, forcing a change of direction that will see insurers targeting IFAs rather than con- sumers, according to a major report published today.
The report, by management and IT consultants Cap Gemini Ernst & Young, reveals product providers will have to focus resources on driving IFAs towards their online channels in an attempt to get market advantage through cost reductions that they failed to achieve through business-to-consumer strategies.
The report shows life companies' projections of cost savings from electronic trading have been cut by two-thirds since last year, with IT departments unhappy with results as consumer migration to the internet has failed to materialise. Instead, insurers are increasing the proportion of their-commerce budget for targeting intermediaries from 40 per cent this year to 55 per cent in 2002 in a move to make it easier for IFAs to deal with providers online.
The report predicts the number of face-to-face insurance sales will fall from 71 per cent in 2000 to 48 per cent in 2004 but bigger transactions will continue to be made face to face. Insurers see the portals and independent aggregators that offer consumers access to all their online accounts from one screen as their main new competitors.
Cap Gemini Ernst & Young head of insurance Sean Crawford says: “Insurers are under tremendous pressure to drive down costs. One of the best ways to do this is to encourage intermediaries online but the online exper-ience has to be good.”
Needanadvisor.com director Ashley Roberts says: “I agree the providers will want to target IFAs more but they must remember IFAs are not prepared to be administrators so they must provide systems that are more efficient.”