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ABI says new model insurers are needed

The Association of British Insurers says life offices need to become “new model insurers” to be successful in the future.

Speaking at a Centaur conference on the retail distribution review last week, ABI director of life and savings Margaret Craig said life companies are seeking to develop new ways to reach consumers as part of a multi-channel distribution strategy.

She said the trend for life offices to offer fewer products is set to continue, with many targeting specific consumer types or specific products.

Craig said the challenge is similar to the one faced by advisers in changing business model in response to the RDR.

She questioned whether life offices have been guilty of focusing too much on investment performance and not enough on customer service. She said more emphasis should be placed on understanding consumer needs as this can be the difference between retaining customers and losing them.

Craig said: “Providers now have a regular-premium savings market that is a fraction of the size once seen. Perhaps surprisingly, I see this as a sign of the emergence of the new model provider, no longer wedded to providing products across the waterfront, instead focusing on delivering those products where they can generate shareholder and customer value.

“No market is intrinsically profitable or unprofitable but firms must focus on those where they can add value.”

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