Opinion: Insurance needs variation
The surprising thing about the divergence between Sovereign's upfront life insurance offer and Fidelity's spread offer is not that they are moving in different directions - it's that for so long some sort of unspoken consensus has existed about the life insurance industry.
Wednesday, December 2nd 2009, 5:10AM
by Russell Hutchinson
There has been relatively less innovation - companies have appeared to move closer together, not further apart, in their appeals to the adviser market.
We've sometime called this game ‘last man standing'. Everyone has the same idea about how to win - and it's been incrementalism all round - whether that's about benefits, premiums, commissions, or service. There have been no new paradigms.
Little wonder, then, that to get something interesting advisers have been looking elsewhere. Companies outside the mainstream have been where some excitement has been generated - think of Accuro's medical insurance, Dorchester Life's Stop-Gap cover, Huljich's KiwiSaver, and so on...
Of course, it's not always been good news outside the mainstream. Also, with newer companies you often get implementation and service issues, but you can see something new being tried - and some of them will emerge to wreak Schumpeterian havoc on the rest of the industry. So it's definitely worth keeping an eye on them.
Of course, it's proverbial that necessity is the mother of invention. 2010 will bring lots of necessity - a need to do something different because of adviser regulation, prudential supervision changes and tax changes for life companies.
So maybe, just maybe, we'll see some more innovation.
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