A L i f e & Pe n s i o n s I n d u s t r y N e w s l e t t e r. June 2015
TechLife
intelligent solutions for life & pensions
Police Mutual Assurance Society selects Exaxe’s Admin Plus and Illustrate Plus solutions as its policy administration platform Exaxe, the specialist solutions provider for the life and
“Police Mutual continues to invest in new solutions to better benefit our members. We chose Exaxe for the
pensions industry, has announced that UK based Police
quality of its technology, together with its business
Mutual Assurance Society has selected Exaxe’s Admin
expertise. We do not have any shareholders, and this
Plus and Illustrate Plus solutions as its new policy
allows us to focus purely on what our members want,
administration platform. The renewable five year
such as using a ‘digital by default’ frame of mind when
licence agreement marks the fourth licence sale for
servicing their needs. By implementing Admin Plus and
Exaxe over the past twelve months and is further
Illustrate Plus, we can provide a higher quality service to
evidence of the growing demand for its software
our members through tailored products and quicker
solutions.
response times. We look forward to working with the Exaxe team”.
The multi-million pound agreement will allow Police Mutual, to consolidate multiple lines of business on a
Philip Naughton, Exaxe’s Executive Business Develop-
single modern technology. Admin Plus and Illustrate Plus will enable Police Mutual to improve service levels, accelerate business innovation and reduce the lead time for introducing new products. The solutions will
“We chose Exaxe for the quality of its technology, together with its business expertise.” David Loughenbury, CIO, Police Mutual
support all aspects of the policy lifecycle from new business, policy servicing, and right through to claim
Illustrate Plus will allow Police Mutual to provide
give Police Mutual the self-sufficiency that its
processing. Admin Plus will also allow Police Mutual to
web-enabled quotations and illustrations direct to
competitors aspire to achieve.
tailor products for different affinity groups and achieve
consumers on a self-service basis. The Product
industry-leading levels of self-sufficiency.
Development Application, within Illustrate Plus, will
David Loughenbury, CIO of Police Mutual commented,
ment Director added, “We are delighted to sign this deal with a customer focused business like Police Mutual Assurance Society. Admin Plus and Illustrate Plus will allow Police Mutual to launch its new products quickly and efficiently giving it a distinct advantage over its competitors. The new modern platform will also position Police Mutual to meet the challenges of a rapidly changing market, both in terms of financial services and the means of delivery.”
2015 UK Budget expands pension freedom strategy // John Keegan – Head of Proposition Delivery – Exaxe It’s difficult to understand what the current
£1.5 million and we were assured that it would rise over the next 5 years to a limit of £2 million. The idea was to
government’s policy to deal with the ageing UK
encourage saving by allowing people to amass
population is supposed to be. For most of the nineties
significant savings for their old age, without allowing
and the noughties, international bodies were warning
the system to be abused by the super-rich. As such, it
all governments that the increasing longevity of the
was reasonable for people to defer current pleasures in
population in the developed world was going to create
the knowledge that they were building a comfortable
a huge problem for OECD countries by the middle of
future for themselves.
the 21st century. Governments were warned that their economies would not be able to withstand the
Now in 2015, the government has carried out another couple of manoeuvres which appear to operate directly against the overall policy of ensuring that people take more responsibility for providing for their own old-age.
pressure of coping with an ever-increasing proportion of their populations being retirees. In response, all sides of the political spectrum in the UK recognised the severity of the issue and began to focus on how to
Unfortunately, when people took the government at their word, the result was a savings pile that has appeared too lucrative for the politicians to resist tapping into when they are struggling to balance their
They ignored the commensurate risk that retirees
on it. As such, that means that from the original pot, a
budget. As a result, the lowering of the Life Time
would squander those savings in the early years of
slice has been taken by the original life provider that
Allowance has become a regular budget event. It is a
Increasing the state retirement age and re-organising
their retirement and revert to dependence upon the
manufactured the product as well as possibly an
specifically bad move for those saving in Defined
the basic state pension were obvious changes and
state in their later years, the very years when earning
adviser who advised on the deal. Now that identical
Contribution schemes as an LTA of £1million would
have been pushed through. However, these were only
would become difficult if not impossible for health
pot will naturally have a further slice taken from it by
penalise anyone trying to save for a pension of over
partial solutions to the problem and there was general
reasons.
the second hand annuity purchaser and possibly a slice
£25,000 per annum – a relatively modest sum.
manage the problem.
will also go to an adviser, if one was used to effect the
agreement amongst all parties that, if a crisis was to be avoided, then the onus must be put on workers
That was the big surprise in the 2014 budget, primed
arrangement. It’s hard to see how the annuitant can
themselves to provide more for their own retirement.
with its effect due to come into force just six weeks
ultimately be the winner in all of this, except in those
Hence the introduction of auto-enrolment, defaulting
before the next general election. Now in 2015, the
rare tragic cases where the need for a lump sum is so
employees into pension schemes so that the vast
government has carried out another couple of
overwhelming that it trumps all other needs. However
majority of the workers in the country would have
manoeuvres which appear to operate directly against
the lure of instant cash lump sums may trump
private savings to supplement their state pension. The
the overall policy of ensuring that people take more
long-sightedness, especially with the general
primary aims of introducing fairness, simplicity and
responsibility for providing for their own old-age.
anti-annuity prejudice that is prevalent throughout the financial press.
above all, personal responsibility were covered by the new reforms.
The first move is to allow existing annuitants to trade in their annuities for a lump sum to a third party,
The other big move in this year’s budget, that was a bit
Since then, the Coalition has embarked on a series of
essentially creating a market of second-hand annuities.
lost behind the headline-grabbing abolition of tax on
changes in the long-term savings and investments area
The need to see how exactly this market emerges has
savings interest, was the lowering of the Life Time
which seem to contradict the previous strategy. Faced
restricted comment from the media and industry on
Allowance (LTA) for pensions; the LTA being the total
with a lot of complaints about the poor value of
the approach but it is certain that there is a big risk for
amount that one is allowed accumulate across one’s
annuities, the Coalition decided against reforming the
annuitants who decide to realise their current income
lifetime for pension purposes. Of course, some limit is
market and instead opted to abolish the need for
as a lump sum. Given increasing longevity the decision
needed to prevent pensions being misused by the
people to purchase them at all, thereby removing the
whether to surrender one’s annuity for a cash lump
ultra-high net worth individuals. But a limit of £1million
very ‘insurance against longevity’ that was needed to
sum is obviously a difficult one and one which most
is far too low to allow people to provide themselves
ensure the strain put on public finances by an ageing
individuals are not particularly well equipped to make.
with a decent income in retirement, given that the average pensioner can expect to live for 20 years after
population would not become over-whelming. Thus, driven by a populist approach predicated on the
Obviously, the would-be purchaser will not buy the
principle that people know best how to manage their
annuity without a reasonable estimation that the
own money, the at-retirement market was opened up
annuitant will live for long enough for the money
The motivation behind this was hard to fathom. When
to allow people full access to their pension savings.
outlaid to be recouped and to make a sufficient margin
LTA’s were originally introduced in 2006, the limit was
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finishing work.
Continued on page 3...
IN THIS ISSUE Police Mutual Assurance Society selects Exaxe’s solutions as its policy administration platform 2015 UK Budget expands pension freedom strategy Technological transformation in the protection world AXA Life Invest goes live with second Exaxe software solution Channel Plus Exaxe appoints Head of Operations Whose data is it anyway?
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What lies ahead The UK life and pensions landscape in 2020
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intelligent solutions for life & pensions
Technological transformation in the protection world // Tom Murray – Head of Product Strategy – Exaxe margin of safety into the rates, an ‘optimism factor’ if
lifestyle choices. Given the increasing obesity issues
This makes it possible and cost effective to get highly
published in the February 2015 edition of the
you like, which ultimately increases the cost that the
being experienced by most developed countries, the
finessed views on the effects of people’s lifestyles and
Investment Life & Pensions Moneyfacts
customer has to pay.
underwriter is likely to need a good deal of specific
genetic disposition on the longevity of the individuals
information regarding the lifestyle of the applicant.
concerned, and on their likelihood to contract certain
This article was originally commissioned and
publication.
diseases and conditions, a key factor for the
Advances in DNA Science Tom Murray explores the impact of emerging
In a better world, we would have accurate medical
Information gathered on this subject is either via a
technologies on the protection market.
information for underwriting departments to base
questionnaire or through questioning by the doctor
assessment of critical illness policies, for example. In other consumer markets, use of technology is providing consumers with highly individualised
I have been working my way through the TV series
experiences, and the ability to rapidly crunch big data
‘House’ over the last few months, courtesy of Netflix,
and to get highly detailed information on the
and I have been struck by the similarity between the
customer is going to become a key factor for life
difficulties faced by the diagnostic team in the
assurance companies as, they try to provide the same
programme and those faced by underwriting teams in
level of personalised customer experience in their
the life assurance industry.
market.
“Everybody lies” is one of the catch-phrases of Hugh
Safety first
Laurie playing the misanthropic Dr. House; as a head
There is one area that could cause this to become a
of the department of Diagnostic Medicine in the
problem, however. The perennial issue for life
series, his primary difficulty in getting to the true
companies is the amount of highly-personalised data
diagnosis of the patient’s condition is the inability to
they hold. Given the previously discussed approach of
get the patient to tell the truth. In order to get the key
using wearable technology to get even more
facts to make the diagnosis, one of his key rules is to
information about the customer, you can see why
meet or talk to the patient as rarely as possible, as the
there would be fears that the information would be
patient’s lies are liable to drive the diagnostic process down the wrong track. Instead, his team breaks into the patient’s apartment or workplace, or hacks computer records to find out the patient’s lifestyle and family medical history, which they need to work out what is wrong with the patient. The exact same issue is one of the key difficulties faced in the protection world. Getting disclosure from the applicant for a protection policy, in order to underwrite it correctly, has always been problematic. The truth is out there, but it can be hard to get it from applicants at proposal stage. I don’t mean by this that fraud is rampant among customers of protection products. Far from it! Many of those who fail to disclose matters material to an assessment of their health believe themselves to be completely honest; it’s just that they either don’t know enough accurate family medical history, or else they are essentially blocking bad news from their own minds. Overlooking or oversimplifying of medical conditions is an inherent human trait to avoid depressing news and focus only on the positive. Thus, frequently unbeknownst to themselves, the customer gives an overly positive view of their health and that of their ancestors. This situation has got somewhat worse over the last 30 years. Increasing labour force mobility means that more people are migrating from country to country, and therefore have a great deal less knowledge about their extended family than heretofore. As a result, life companies have had to price their products against the fact that full disclosures are not always made and the incomplete nature of the disclosure is not always discovered in time to prevent a pay-out. Curiously enough, incomplete disclosure is always on the negative side - practically nobody fails to disclose positive news that will reduce the cost of their insurance. Although medical examinations are routinely carried out, they don’t necessarily give the complete picture as many medical issues rely on the symptoms and facts as described by the customer. The only safe approach for life companies is to build a
Transform your business and contact us today!
their assessments upon. This would be fairer to both
during a medical examination, and therefore, the
life companies and their clients. And this is where the
accuracy of the information is completely dependent
huge advances in science, and in particular in
upon the accuracy of the descriptions given by the
technology, is set to transform the whole underwrit-
individual. The trouble here, of course, is that we all
ing area.
tend to fool ourselves about how much we eat, how much exercise we take, how much sleep we get etc.
Incredible leaps forward have been made in the
And here again technology can provide the answer.
science of DNA over recent decades. Access to this information would dramatically improve the ability of
The advent of wearable technology at an affordable
underwriters to individually underwrite to a new,
level means that it is possible to gather and monitor
hitherto unforeseen, level. Genetic disorders are a
information about the prospective customer’s activity
significant factor in assessing the likelihood of an
levels, including their sleeping patterns, pupil dilation,
individual acquiring a life-expectancy altering
blood-pressure, and heart rate during their day to day
condition later in life. Currently the industry is
activities. This constant monitoring of vital signs will
primarily reliant on family histories answered by the
give the level of accuracy that will allow near-perfect
client, but access to DNA testing would significantly
assessment of the individual’s state of health, which
improve the life company’s ‘hard’ knowledge of the
will bring the life companies’ ability to fine-tune and
customer without having to rely on the customer
personalise risk profiles to a level previously
themselves. The trouble is that DNA testing has, up to
unimagined.
recently, been a highly specialised and expensive process.
Wearable technologies allow far more accurate assessments of an individual’s health and, in particular,
Advances in technology are making it far easier to test
their lifestyle. Apps are available that allow people to
for these disorders and it won’t be long before the
record their diet during the day, giving definitive
majority of tests can be carried out on simple
answers to the questions, and probably quite a shock
machines in doctor’s surgeries and clinics, rather than
to many individuals. Remember, an iPhone 5 has a
in high-tech specialist labs. This will mean that it will
CPU that is 1,270 times faster than the Apollo 11
be far easier to get a full and accurate report on the
guidance computer than landed the spacecraft on the
likelihood of genetic diseases manifesting themselves
moon. Technology such as Google Glass (version 2.0 is
from a source that can’t lie – the customer’s own body.
now being worked on) will almost certainly increase
As the cost of these tests is reduced by technology, it
the amount of personal information that can be
will become cost efficient to carry them out on all
gathered by apps without requiring significant effort
applicants, rather than just on those who are applying
by the person wearing them.
for extremely large insurance amounts. Analyse this! This increased knowledge will make it easier to refine
Of course the volume of data that can now be
the pool and therefore to provide cheaper underwrit-
gathered will also play a big part in increasing the
ing to the healthy clients, and to load those who are
accuracy of underwriting if it is possible to analyse it
genetically pre-disposed to the type of conditions
correctly. This is where recent advances in technology
that will affect their mortality. We can expect the
will also help. The ability to churn through ‘Big Data,’
ever-increasing pace of DNA research to reveal a lot
as it is referred to, has made huge strides. The
more as time goes on, and technology will make this
increasing power of technology now makes it feasible
information available to life companies.
to quickly process vast volumes of data, establishing patterns that could never be discovered by more
Lifestyle choices Another key factor in underwriting individuals is their
manual means.
leaked. After all, some of this information the customer was even hiding from him or herself, and certainly he or she would want assurance that the information will not become widely available. Therefore a key concern is the ability of companies to keep this volume of highly personalised data secure. To get people to give this kind of information, it is necessary to be able to assure them that the data is safe and will not be leaked or misused. Here technological advances in data protection will make it easier, as huge amounts of money are currently being ploughed into the area of data security. The fact that it is a key issue for governments as well is reassuring as this means that funds will constantly be made available for research in this area. Despite the media trumpeting of occasional security failures, trust is nevertheless growing rapidly in data security. Just a decade ago, most people were extremely wary about using their own credit card details online, and yet now a huge proportion of the world uses the internet to shop and are quite comfortable using their financial information online in order to do so. According to Statista.Com, the amount of shopping carried out online in the USA for Christmas 2014 was 45% of the total holiday spend. This makes it easier to see a future where people will not be wary of sharing that level of personal medical information with life companies, giving us a protection market that is better value and more customisable than ever before. Technology is changing our tomorrow It is possible for people to be wrong. Even the incredibly astute and clever Dr House can get it wrong; “it’s not lupus – it’s never lupus” …until it actually was lupus in the eighth episode of the fourth series. However, the availability of such a huge amount of detailed and personalised data, and the ability to process it rapidly, means that far more accurate predictions of future health and longevity are possible for underwriters, which will usher in a new era of heightened accuracy and personalisation in the protection market.
T: +353 (0) 1 2999100 E: info@exaxe.com W: www.exaxe.com
: @Exaxe
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intelligent solutions for life & pensions
AXA Life Invest goes live with second Exaxe software solution Channel Plus // Sharon McGuire – Marketing Manager – Exaxe Further to the recent announcement that AXA Life
Tom Lane, Head of IT at AXA Life Invest, commented
Invest has successfully gone live with Exaxe’s Illustrate
“AXA Life Invest experienced some challenges with
Plus solution, Exaxe is delighted to announce that AXA
respect to the management of commissions and fees
Life Invest has now successfully gone live with
paid to its partners and approached Exaxe to provide
Channel Plus, Exaxe’s agency managed, commissions
an enterprise solution for the management of fees
calculation and payment solution.
and commission going forward. In a few short months our relationship with Exaxe has developed and we are pleased to have taken this next step with them.”
Channel Plus is a web-based, automated solution that supports agency and compensation management for the life, pensions and wealth management sectors
“Exaxe is delighted that both Channel Plus and
across all distribution channels. The implementation
Illustrate Plus software solutions have gone live with
of Channel Plus will enable AXA Life Invest to unify its
AXA Life Invest. Our solutions allow our customers to
entire agency and financial advisers’ administration
respond to a dynamic market place with the speed
services onto a single platform, yielding operational
and efficiency necessary to become market leaders.”
efficiencies and providing an improved service to all
Philip Naughton continued.
its distributors. Philip Naughton, Executive Director Business Development at Exaxe, commented “As a worldwide leader in innovative guaranteed unit linked products, AXA Life Invest needed a best of breed approach.
“In a few short months our relationship with Exaxe has developed and we are pleased to have taken this next step with them.” Tom Lane, Head of IT, AXA Life Invest Today, it has been able to leverage Exaxe’s capability
therefore keep it at the forefront of the market”.
“We are delighted to have signed this second contract with AXA Life Invest. It highlights our long term vision we share and is representative of the strong relationship we have built.”
and expertise into the core of its systems, and
Exaxe appoints Ian Dornan as Head of Operations // Sharon McGuire – Marketing Manager – Exaxe Exaxe is delighted to announce the appointment of
hardware and communications.”
there is always an appetite for innovative business solutions especially where they have a proven track
Ian Dornan as its new head of operations. The move coincides with the company’s recent announcements
“Ian joined Exaxe in January 2015 with his main
record of being cost effective and delivering
of new long-term contracts signed with Police Mutual
objectives to assist the Board with general business
significant business efficiencies. We are also currently
and AXA Life Invest. Ian has been brought on board to
operations and to assume responsibility for internal
hiring business analysts, .Net developers and software
continue driving this growth by further developing
product development, client implementation and
test engineers.”
the company’s software development and client
post implementation support as the business
delivery capabilities.
continues to grow and expand.”
Ian Dornan, Head of Operations at Exaxe, commented: “I am happy to have joined Exaxe at such an exciting
Norman Carroll, chief executive officer at Exaxe says:
Norman Carroll continues:
time for the company. It has given me a great
“Ian joins us with over 18 years’ experience in a variety
“Our appointment of Ian coincides nicely with our
opportunity to hit the ground running. I look forward
of IT operational management roles, 14 of those years
recent client wins. We are particularly delighted with
to building relationships with Exaxe’s new and existing
specifically within the financial services sector with
this growth in sales and the opportunity to create new
clients and to working with the Exaxe team.”
extensive experience in software development,
jobs in the current economic climate. It proves that
Ian Dornan, Head of Operations at Exaxe.
2015 UK Budget expands pension freedom strategy // John Keegan – Head of Proposition Delivery – Exaxe Continued from page 1...
encouraging a more consumerist outlook on finances
through their savings at quite an early stage in their
government finds it too difficult to resist tweaking
than was hitherto imagined. For all the failings of the
retirement; this effect will be compounded by the fact
pension and long term savings regulations to please
Some of these changes are arguably positive moves
annuity providers, they did provide the security
that survey after survey shows that the average
the public then perhaps it could be an area reserved
for a subset of retirees. But the cumulative effect of so
against longevity that is so treasured by the relatively
person consistently and substantially underestimates
for the Upper House, in any future constitutional
many changes is undeniably bad. It has meant that
silent group of consumers who have outlived the
their own individual longevity.
changes.
the pension policy area has been one of the most
average lifetime of their peers. If the government keeps tweaking the rules and
Given that the House of Lords is generally less partisan
unstable policy areas over the lifetime of this government and this instability is anathema to good
Even financial advisers are finding it difficult to decide
regulations around taxation, savings and investments
than the House of Commons and is immune from the
long-term financial planning.
what to advise people to do when the landscape
then it supports an idea of short-term thinking when
pressures that arise from the need to get re-elected,
keeps changing so dramatically; today’s good advice
it comes to finances. This is the very last thing we
taking the long-term savings policies out of the remit
Whilst the government was formed with a policy of
is rapidly becoming tomorrow’s poor advice with the
should be giving the increasing lifespan of the
of the day-to-day policy making of the government
‘nudging’ to encourage people to do the right thing,
attendant risk of being perceived as having coerced
population and the shrinking workforce, which will be
would give the opportunity for a more far-sighted and
the nudges are now positively contradictory. On the
people into doing the wrong thing with their money.
left trying to support them. Perhaps this is just a
consistent policy to be put in place. This policy could
one-hand, auto-enrolment is pushing people into the
Every move by the government to ‘free’ people from
temporary move given that the last two budgets were
be cross-party and therefore less vulnerable to the
idea of saving and making them consider the need to
the chains of financial products that pay out for the
focused on the election and the nudging of people to
changing winds that blow across the political arena
provide for themselves in their old age. On the other
duration of their lifespan directly undermines the
save across their working life and to use those savings
when elections are in the offing and a policy that
hand, the constant trumpeting of the new ‘freedoms’
goals of making them take responsibility for their own
to provide for themselves throughout their retirement
would therefore provide the stability that people need
to take your money as a lump sum at retirement is
future by auto-enrolling them into financial savings
will resume. Unfortunately, even if that is the case, it
when it comes to long-term planning.
nudging people towards rewarding themselves with
products.
would mean that a new raft of rules and regulations
big spending at the end of their working career and
are planned for early in the new government’s term
Without a solution, the contradictions inherent in our
stopping them from thinking about the need to
We have ended up with a contradictory mess; a
which would destabilise the ability to plan even
approach will completely undermine our response to
husband their resources over a much longer period.
pantomime in which the life and pension providers
further.
the longevity issue raised by the OECD, and govern-
are being cast as the bad guys whom the pensioner
ments in the mid-century will wonder why we
The result is becoming chaotic. The public are being
needs to be protected from. The end result of this can
What is needed is a return to a more bi-partisan
squandered such an opportunity to provide a
told that they are being ripped off by the financial
only be to encourage more and more people to realise
approach to pensions and long-term savings and to
sustainable solution to the good ‘problem’ we have of
services sector by government, regulators and the
their savings as a lump sum, despite the tax penalties
take the area completely out of the political arena,
people living longer.
financial press. Without planning it, this is
in doing so. As a result, a lot more people will have run
which by is nature is ‘short-termist’. If the
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intelligent solutions for life & pensions
Whose data is it anyway? // Tom Murray – Head of Product Strategy – Exaxe There is a lot of talk about the effect of big data on
by the one who merely stores it.
the world of product retailing and how it is going to
Perhaps the problem stems from the sidelining of data
transform the whole sector. Mass retailers, such as
during the system purchase process. The purchasing
supermarkets, are to the forefront of this charge
decision always seems to focus on the business
expending massive amounts of time and money to
processes of selling or administering the policies
analyse the data of their customers; tracking their
involved and never about the need to have full,
purchases via loyalty schemes in an effort to get and
unrestricted access to all the data about one’s own
retain customers and to make them spend more. Even
customers. And yet, without this freedom of access,
smaller businesses are working hard to understand
full analysis of the information is almost impossible.
and track the spending habits of their customers in
No matter how flexible the interface appears to be,
order to finesse their offering to them.
the fact that the database information, and how it is stored, is kept a secret by many systems providers
The same effort is required in the financial services
inhibits the freedom of thought and action that is the
sector. Unlike many businesses, the nature of the life
Future purchases of information technology solutions should weigh very heavily on the ability to access the company’s own data.
and pensions industry means that we are in possession of a huge amount of data about our customers; substantial amount nonetheless. This gives us the customers better. The nature of the consumer market for financial products is changing swiftly; increasing longevity is leading to huge changes in the pensions sector, but it is also dramatically altering the needs of consumers in the life sector. Protection, critical illness, long-term care, equity release; these are all areas that are seeing significant transformation as the nature of people’s working and retirement lives change. With the needs of the public altering so rapidly, it is vital for the industry to respond just as rapidly if it is to be in a position to fulfil those needs. As the supermarkets and the online industries have shown, monitoring the movements in the buying habits of their consumer base is key to understanding the needs of their customers and to predicting what
assessing trends of past and current consumption and who need to predict the future.
perhaps not as much as the big supermarkets but a opportunity to mine that data to understand our
key driver of discovery for those who are tasked with
Big data is not just a current fad. It is the future of those needs will be in the future. In the past,
accessing their own information is through
retailing and predicting future needs and all industries
customer-driven product development has not been
management information and business information
require the ability to utilise the data they have to
the area where the life and pensions sector has
provided by their systems supplier, which frequently
ensure they stay competitive in the rapidly changing
particularly sparkled, but it is certainly where it needs
have an extremely limited interface.
markets in which they are operating. Life and pension
to be focusing in the future if it is not to lose market
companies are no exception to this rule.
share to new entrants with a more customer-focused
Some technology providers can feel that the
ethos. Trying to remain relevant to the customer in a
underlying data structure is part of their IP, and are
Future purchases of information technology solutions
market that is being opened up by deregulation is
reluctant to allow the purchasing life and pension
should weigh very heavily on the ability to access the
difficult enough, not to mention being in a market
companies to have a full understanding of it, for fear
company’s own data. It does not belong to the
where the growth in lifespan is completely changing
that they may replicate the system by building their
solution provider so the fact that so many of them
the requirements of the end-consumer.
own version. Some even retain control by
retain control of access to this information is
providing a black box solution where there is no
completely unacceptable and is likely to hobble the
It is, therefore, vital to be in a position to access all of
access to anything other than pre-defined GUIs and
life company performance in the market. To be able
your data and to mine and manipulate it in many ways
Interfaces. This is very limiting for the life and pension
to service your customers properly, you should
to try to derive information, patterns and theories
company who purchases the system, as it effectively
purchase from technology providers who allow full
from it. A key part of being in a position to do so is
means that their own data on their customers is being
access to the customer data and the rules under which
having access to the data itself. Yet here we can
fed out to them in a manner defined by the solution
it is held. It’s your data; make sure that no one else is
frequently come up against a major problem. For
provider. This is truly a case of the cart leading the
blocking your access to it.
many life and pension companies, the process of
horse, as the owner of the data is being constrained
What lies ahead – The UK life and pensions landscape in 2020 // Norman Carroll – Chief Executive Officer – Exaxe While I don’t claim to have 20/20 vision, I do have a
provide these interfaces to the customer, enabling the consumers to see their complete financial portfolio
view of what the UK’s life and pensions landscape will
– income, investments and protection – in one
be like in 2020, and it is one that will be hugely
place.
different from the one we see today.
Holistic views will become more important as
The changes introduced in recent years have
customers demand individual views of their own
transformed the game completely. They will take some
financial situation, as they seek to plan for their
time to bed in but their effects will be dramatic,
retirement, long-term care and estate planning needs.
particularly the effects of the Retail Distribution
This will require a level of individual underwriting that
Review, the reforms in the at-retirement space and the
life and pension providers can provide using the
introduction of auto-enrolment. For instance,
smarter technologies that are emerging, including
auto-enrolment will introduce millions of people to the
wearable technologies. The ability to underwrite at an
use of financial products for saving and will thereby
individual level due to advances in the science of DNA
provide great opportunities for cross-selling of other
will come to the fore in a world where medical science
financial products. We are living in a highly brand conscious age and this
Life and pension companies have been through a lot of change over the past 5 years, and this rate of change is only going to accelerate.
expanded consumer market will be looking for the type of protection that can only be provided by big brands. Meanwhile, the deregulation of pensions will lead to the demand for niche products for the more financially savvy investor. In response, I expect new entrants will appear from other markets; big brands that have the trust and engagement to market effectively to brand conscious consumers, and niche players that will seek to capitalise on the sophisticated
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is increasing the lifespan of the population at a rate that would have been seen as unbelievable just two decades ago. The life and pensions organisation looking to thrive in
investor’s new freedoms for at-retirement investment. I
I also foresee that consumers will expect the kind of
the customer-centric market of 2020 needs to increase
predict many joint-ventures between these new
multi-platform service that is becoming prevalent
its use of technology to provide individualised product
entrants and existing market players, to provide the
today in so many other industries. An ability to allow
matching to individual customer needs. Life and
product knowledge and management needed for
consumers to manage their own investments and carry
pension companies have been through a lot of change
white-labelling by the brand leaders, and also to
out transactions from smartphones and tablets will be
over the past 5 years, and this rate of change is only
provide the day to day product administration needed
a sine qua non of life and pension services in the next
going to accelerate. It is an exciting time for the
by the niche entrants.
decade and existing providers are ideally placed to
industry and for all of us involved in it.
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