Mismatch leads to visible decline in the business claims market

By | Insurance, News

More and more occupational groups are (temporarily) uninsurable. The business claims market is going through major developments and is looking for a new balance. Due to a sharply reduced supply and increasingly complex needs, a mismatch is increasingly arising. One that will not be solved for the time being. This is shown by the IG&H Performance and Distribution Monitor.

Since the big blow in the sector ten years ago, insurers in the business claims market have been struggling with their positioning. Which target group do they want to serve and, for example, do they work with authorised agents or not? Until there is clarity about the price, the supply side is strongly standardized to limit risks. As a result, our monitor shows, the sector is effectively standing still in its development.

Conflicting developments

The sector is faced with a mismatch between supply and demand. On the one hand, the complexity of customer demands increases. What used to be a simple risk is changing into a complex risk due to demographic, ecological and technological developments.

At the same time, the range of products offered by insurers is shrinking and even more standardized, among other things through new data solutions which should exclude risks. Although these can have a positive impact on financial performance, they also increase the number of uninsurable groups. This resulted, among other things, in reports in the news about taxi drivers and waste processors. The monitor also shows that, for the first time in a long period of time, independent advisers are not as good at assessing the services provided by insurers in the commercial property-casualty market.

Finding balance is not possible without a fight

Insurers will have to break this trend. In the future, the market will have to move back to a new balance in which customer and insurers share the risks. IG&H sees three different options; hyper focus on niche specialisation, an increase in scale or expansion of the service. Finding a new balance will be gradual, but it will be tricky, since certain professional groups are (temporarily) difficult to insure.

Share of independent insurance advisors increases further

By | Insurance, News

The share of independent advisers in the distribution is increasing, but the evaluation of insurers’ services is deteriorating, according to the Performance and Distribution Monitor of IG&H. Are insurers properly pre-sorted?

Last year we reported that the independent consultant was on a strong rise. The most recent data show that this growth continues. With the exception of the life market, the share of independent consultant remains at least equal. In the commercial insurance market, individual income market and mortgage market, the share of independent consultant even increased. Due to the strong positioning of the advisor for advice requirements regarding mortgages, occupational disability and (new) business risks, this growth is expected to continue.

Tension field of interest advisers and insurers
However, the evaluation of independent consultants’ insurance services is declining. Historically, insurers in private sub-markets were better assessed than those in business submarkets. In the last measurements, this difference was reduced because the performance in private submarkets deteriorated. This is partly due to the need to realize cost savings.

The market is clearly in motion. Insurers are rearranging their processes and improving solvency, agitated and under pressure from shareholders and regulators. In the search for a new balance, the emphasis is now on cost reduction and risk reduction. That is why they make strong choices in the areas of products, processes, pricing and remuneration. In some cases in the non-life insurance market, this even leads to uninsurability within certain branches.

Together with a declining performance, this all forms a breeding ground for a lower NPS. Given the prominent and often even increasing importance of advisers in distribution, this creates a tension field.

Jan Pieter van der Helm
Director Insurance at IG&H
j.vanderhelm@IGH.NL

Granular share of wallet data for all major product lines for truly data-driven sales management

By | Analytics, Insurance, Uncategorized

What they wanted
Make data-driven choices in the broker market: that is what leading Dutch omnichannel insurers want to be able to do. Key questions are: Who are today and tomorrow’s leading brokers? Where do we stand in terms of both volume and NPS? How do we enhance our position to realize sustainable growth? To this end, they wanted to gather in-depth data on volume, movements, share of wallet, and NPS. Read More