UK Bancassurance: Bank Distribution of Long-term Investments 2011 Datamonitor's FSCI 2011 survey reveals that 37% of mass affluent pension holders utilized a workplace representative to open their pension scheme. Banks were not a channel commonly used by mass affluent consumers when opening a pension, with only 4% having doing so. Banks suffer from a lack of conversion from the point of a discussion between a bank advisor and a customer through to the purchase of a long-term investment product. However, there is an opportunity for bank advisors to develop their relationship beyond the bank branch and into the workplace. Request a Sample for or Inquire before buying the report UK Bancassurance Market Features and benefits   
Plan your strategy effectively by having primary consumer insight to consumer attitudes towards using banks when seeking financial advice. Identify viable alternative channels to distribute long-term investment products. Access comprehensive analysis and strategic action points for the UK bancassurance market to drive new business. Major points covered in Table of Contents of this report include: OVERVIEW Catalyst Summary EXECUTIVE SUMMARY Bancassurance is not a dominant channel for the distribution of long-term investment products There is an increased regulatory focus on the sector but it will provide a competitive advantage in the long-term For products such as pensions, consumers rely on workplace representatives and disregard bancassurers However, consumers have future intentions to use their primary banks to seek financial advice There is no single model for bancassurance, which ranges from a pure distribution agreement to a wholly owned subsidiary of the bank A winning bancassurance formula hinges on essential operational components, customercentric approaches, and effective cross-selling MARKET CONTEXT Introduction
Bancassurance sales of pensions and investment bonds have fallen drastically over the past five years Bancassurers have lost market share in the UK pensions market from the 2007 peak Bancassurers have seen increasing sales of personal pension products over other types of pensions Bancassurers have maintained their market share over the past five years in the distribution of investment bonds Unit trusts and open-ended investment companies form the basis for banks' regular savings and investment products The increased regulatory focus will be a short-term challenge but potentially a long-term source of competitive advantage The RDR will change the size and shape of the UK bancassurance market going forward The RDR is likely to create a reduction in the overall supply of investment advice Bancassurers will look away from capital-intensive product lines as a result of challenges from Basel III and Solvency II The impact of capital strain on banks may mean that insurance products will get higher priority over long-term investment vehicles There is a need for banks to rebalance towards non-capital and non-risk bearing products Solvency II will introduce consistent capital requirement measures Basel III will lead to banks reassessing their insurance assets Forecast sales through bancassurance show that the channel will maintain market share over the next five years Bancassurers will not be able to gain market share away from IFAs in the distribution of pensions over the next five years The sale of investment bonds will continue to be firmly focused through the IFA channel CONSUMER ATTITUDES TO PENSIONS AND BANK ADVICE STRATEGIC ACTION POINTS Introduction Workplace marketing offers lucrative potential for banks to target mass affluent consumers in distributing long-term investment products The workplace can facilitate consumers’ search for more financial information, away from traditional avenues Bancassurers have a ready pool of mass affluent clients in the "advice vacuum" left by IFAs shifting their focus upmarket due to the RDR Workplace pensions reform will place greater emphasis on the importance of the workplace in providing financial advice and services However, banks must target the right industries and consider the level of access they are able to achieve within each company for the distribution of long-term investment products Offering a total-product suite in the workplace will give banks further cross-selling opportunities Bancassurers have key areas where particular differentiation can be achieved for consumers Banks must focus on building emotional ties with customers instead of marketing themselves purely on a commodity basis Building customer relationships will offset the consumer mistrust created during the recession Banks should look towards simplifying the purchasing process and improving the buying
experience A winning bancassurance model requires banks and insurers to assess key components of the operation Risk appetite assessment must be undertaken by banks when determining a bancassurance model The attitudes towards classes of business that banks should manufacture or distribute must be considered Competitive advantage and differentiation must be established especially in distribution-only models The desired level of profitability on the capital employed must be assessed to ascertain whether bancassurance should be adopted at all Capital requirements will have a major impact on the chosen bancassurance model Third-party product providers also need to be aware that distribution channels cannot be viewed independently of each other Bancassurers must take advantage of cross-selling opportunities within their existing customer base Banks should use their ability to cross-sell within branches as an opportunity to increase revenue Careful segmentation is a necessity to target insurance cross-sales Banks should also facilitate customer cross-buying and not just focus on cross-selling Bancassurers have three options to address the problems posed by capital constraints through regulation Banks may take the opportunity to reassess the option of divesting their insurance operations Group capital structures can be enhanced and risk management undertaken to address regulatory proposals Banks may undertake product rationalization and move to less capital-intensive distribution models APPENDIX List of Tables List of Figure Explore Comprehensive list of Tables & Figures available in the report @ http://www.reportsnreports.com/reports/149626-uk-bancassurance-bank-distribution-oflong-term-investments-2011.html. Report Details: Published: February 2012 No. of Pages: 58 Price: Single User License – US$4495
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