Wealth Management Opportunities in the European Life Insurance Industry

by Isabella Fonseca,  Nicolas Michellod, December 21, 2010
Industry Trends
EMEA

Abstract

The concepts of investing, saving, and wealth management encompass a broad set of services focused on managing clients’ wealth. Wealth management brings together not only managing clients’ assets but also other products such as tax planning, pension plans, real estate, art advisory, investments, and insurance.

In a new report, Wealth Management Opportunities in the European Life Insurance Industry, Celent provides an update on the life insurance industry in Europe, focusing on the distribution landscape and investment products related to insurance. The European life insurance market has experienced a period of turbulence in the past three years, and the main countries remain at different stages of development, as they were before the financial crisis.

“The recent financial crisis has triggered changes in the way insurers and insured perceive the value of investments and savings insurance products,” says Nicolas Michellod, Senior Analyst with Celent’s Insurance Group and coauthor of the report. “It seems that we have reached a crossroads, where investment and savings insurance products involving high market risk for individuals and insurers have become a second choice to protection products.”

“Life insurance companies are well positioned to distribute wealth management related products and be long-term retirement solution providers,” adds Isabella Fonseca, Research Director and coauthor of the report.

This report looks at IT spending levels by life insurers in Europe and evaluates technology trends. The report also provides a view of the main IT vendors active in the wealth management space that are targeting life insurance companies. It concludes with a prospective look at the future of the life insurance industry.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

5

Methodology

5

The State of the Life Insurance Market in Europe

6

 

Development Stage

6

 

Impact of the Financial Crisis and the Economic Downturn

8

The European Life Insurance Distribution Landscape

11

 

The Success of Bancassurance

11

 

Independent Financial Advisors in the UK

12

 

The German Preference for Traditional Channels

13

 

Distribution Predictions

14

An Opportunity for Wealth Management Products within the Insurance Industry

16

 

Types of Products

17

 

Who Bears the Market Risk?

19

IT Trends, Spending, and Technology Applications in the Insurance Industry

22

 

IT Trends and Initiatives

22

 

Life Insurance IT Spending

24

 

Wealth Management and Insurance Applications for Life Insurers

26

Looking Forward

29

Leveraging Celent’s Expertise

30

 

Support for Financial Institutions

30

 

Support for Vendors

30

Related Celent Research

31

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