The UK life business has changed completely over 20 years says Mike Elliott of LIMRA, and he pleaded to the local community to not make the same mistakes that the UK market made.
Elliott was speaking at the LOA convention recently, and by way of proof he says that the UK market is hugely consolidated, with the top15 providers now controlling 90% of business. As a trend Elliott says that there is activity in the medium company sector.
He mentioned that worryingly direct sales force numbers have declined, from a high of
190 000 in 1981 and this has since dropped to 10 000 people. And while those that are left are highly regarded and making money, there major concern is the high pile of paperwork that is created.
A new move is afoot in the UK and its in the direction of the multi tie route: where there is life product provider; one insurance, and health product provider, with an independent agency force operating separately of the three, and managed by the agency management team. They have access to three best of breed products.
Elliott says that the rest of the UK market is watching to see if will work. It is just 1 months into the experiment and it appears that agent retention has improved. He says that indications are that if agency management is given top and bottom line responsibility, it seems to work and they will do the right thing for the business.
An interesting trend in the UK is that there is hardly any cheap financial advice available, and the IFA numbers are coming down. Added to which consumers are unwilling to pay for advice from an IFA.
On the other hand their research is showing that face to face selling is becoming just too expensive, while there is a low take-up of personal pension products.
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