$470 billion of premiums “up for grabs” says report
As much as $470 billion in life insurance and property & casualty insurance premiums will be up for grabs globally as a result of declining customer loyalty and the perceived commoditization of products, according to a new report from
Accenture. The survey found that less than one-third (29 per cent) of insurance customers are satisfied with their current providers. At the same time, the number of customers who believe that most insurance carriers are the same in terms of their products and services jumped 50 percent in the last year, to 21 per cent in this year’s survey from 14 per cent in a similar survey last year.
Less than one in six customers (16 per cent) said they would definitely buy more products from their current insurance provider. In addition, only one in four (27 per cent) has a high estimation of their insurance providers’ trustworthiness, and nearly one in four (23 per cent) said they would consider buying insurance from online service providers, including technology giants. Almost half (47 per cent) of respondents said they want more interactions online with their insurer.
Marsh continues its acquisition spree
Global insurer Marsh and its subsidiaries have been in buying mode recently with acquisitions of Cline Wood Agency, JW Terrill, MHBT and Canada’s Vezina. Now it has announced that it is to buy technology services company Dovetail Insurance. The South Carolina firm has developed an advanced cloud-based technology platform that enables independent insurance agents, on behalf of their small business clients, to obtain online quotes from multiple insurance providers and bind insurance policies in real time. The acquisition by Marsh, for an undisclosed sum, is expected to close in the third quarter of 2015.
Manulife profits drop, Sun Life increase
Two of Canada’s largest insurance companies have released financial results. Manulife Financial has seen profits hammered by interest rates and investment yields. However the insurance business has seen good growth with sales increases of 27 per cent across the US, Canada and Asia to reach $771 million for the quarter. Net income for the company overall was down 36 per cent to $600 million. Meanwhile Sun Life benefitted from its growing business in Asia with net profits up to $726 million. Insurance sales increased 8 per cent.
Zurich eyes unwilling UK target
Swiss-based insurer Zurich; which has announced a 1 per cent drop in second-quarter net profit to $840 million; said this week that is considers UK insurer RSA as a “complimentary fit” to its existing business but its target’s chief executive seemed to dismiss the idea Thursday. Although he could not confirm if Zurich had made contact due to competition law, Stephen Hester told CNBC that RSA intends to be a standalone company and said that being bigger is not necessarily the best option: "There is no evidence from the insurance industry that there is only one business model that succeeds (not about being big, small or medium-sized). There is no industrial imperative that says size or shape matters in this industry.”
