Distribution dynamics in European insurance

Distribution dynamics in European insurance

Introduction
 
This report discusses the changing distribution dynamics in European Life and Non-Life insurance, drawing out key operational implications for insurers. It subsequently discusses changing priorities in distribution technology investments, explores implications for technology vendors in the insurance application, BPM, EAI and CRM space, and forecasts technology spend to 2009.
 

 
Scope
 
Covers all major Western European markets
 
Provides analysis of differences in the Life and Non-Life insurance sectors
 
Forecasts distribution technology spend by channel, country, source and common distribution platform project spend
 
Discusses implications for vendors playing in policy administration, BPM, EAI, CRM, ICM and other areas
 
Highlights
 
The separation between manufacturing and distribution will persist, with the difference that the boundaries are still being defined in Life, whereas Non-Life is more mature in this respect. Insurance manufacturers have to be able to cost-effectively connect to a variety of distribution channels whilst minimizing extra cost.
 

 
Insurers realize that back-office transformation is increasingly inevitable, with several companies starting to define strategic target platforms in the back-office. Addressing the issue of distribution is a driving force of these efforts, with the focus shifting from front-office 'quick-fixing' towards realizing the 'one-to-many back office'.
 

 
The insurance sector is set to become the forerunner in the adoption of service-oriented architecture (SOA), with value chain fragmentation (e.g. increased outsourcing and separation of distribution and manufacturing) causing insurance to adopt an increasingly 'SOA-like' business model.
 

 
Reasons to Purchase
 
Understand insurers' business pain points and how they will impact future technology investments
 
Gain a perspective on how changing investment priorities will impact technology vendors playing in the insurance space
 
Access detailed forecasts of European insurers' distribution technology investments to 2009
 

TABLE OF CONTENTS
 
CHAPTER 1 EXECUTIVE SUMMARY 3
 
Key take-outs 3
 
CHAPTER 2 MARKET CONTEXT 9
 
Business dynamics in Life and Non-Life distribution 9
 
Life distribution – insurance that is ‘sold’ 9
 
For insurers, distribution is becoming a ‘plug-and-play’ and ‘process orchestration’ game 13
 
The competitive imperative: insurers must become ‘easier to do business with’ as the battle for shelf-space heats up 14
 
The operational imperative: insurers must become more efficient and flexible at servicing a variety of distribution channels 17
 
Technology implications 18
 
The functional perspective: the focus will shift from quick-fix investments in the front-office towards realizing the ‘one-to-many’ back-office 18
 
The application perspective: the BPM / EAI technology stack will become the ‘superstar’ of insurance distribution projects 21
 
The architectural perspective: the insurance sector is set to become the front-runnner in the adoption of service-oriented architecture (SOA) 22
 
CHAPTER 3 COMPETITIVE DYNAMICS 24
 
The vendor landscape 24
 
Mapping the future insurance distribution hot spot 26
 
Traditional front-office / CRM players 28
 
Back-office application players 28
 
BPM / EAI players 29
 
CHAPTER 4 THE FUTURE DECODED 30
 
Total European distribution spend 30
 
Distribution spend by channel 30
 
Distribution spend by country 33
 
Distribution spend by source 36
 
Common distribution platform project spend 38
 
CHAPTER 5 APPENDIX 41
 
Abbreviations 41
 
Future readings 41
 
SPP writing team 42
 

 

 
LIST OF TABLES
 
Table 1: European L&P distribution technology spend 2004-2009, by channel 32
 
Table 2: European Non-Life distribution technology spend 2004-2009, by channel 33
 
Table 3: European L&P distribution technology spend 2004-2009, by country 34
 
Table 4: European Non-Life distribution technology spend 2004-2009, by country 36
 
Table 5: European L&P distribution technology spend 2004-2009, by source 37
 
Table 6: European Non-Life distribution technology spend 2004-2009, by source 39
 
Table 8: Common distribution platform project spend in European insurance, 2004-2009 41
 
LIST OF FIGURES
 
Figure 1: Executive Summary 3
 
Figure 2: Executive Summary (cont.) 4
 
Figure 3: Advisory focused intermediaries offering a range of providers’ productsare set to grow by 2009 11
 
Figure 4: How important are the following factors in encouraging you to use a provider’s site/portal? 16
 
Figure 5: Insurers are gradually shifting investments towards realizing the one-to-many back-office 20
 
Figure 6: The vendor landscape relevant to insurance distribution 24
 
Figure 7: Positioning criteria for distribution vendor matrix 26
 
Figure 8: The distribution vendor matrix 27
 
Figure 9: European L&P distribution technology spend 2004-2009, by channel 30
 
Figure 10: European Non-Life distribution technology spend 2004-2009, by channel 32
 
Figure 11: European L&P distribution technology spend 2004-2009, by country 33
 
Figure 12: European Non-Life distribution technology spend 2004-2009, by country 35
 
Figure 13: European L&P distribution technology spend proportions 2005, by source 36
 
Figure 14: European Non-Life distribution technology spend proportions 2005, by source 37
 
Figure 15: Common distribution platform project spend in European insurance, 2004-2009 39