According to a recent State Street survey, 87 percent of participants think that it is likely there will be more mergers and acquisitions (M&A) within the insurance sector over the next five years.
Only 8 percent of the 176 UK-based independent financial advisers (IFAs) asked believe that there will be less M&A activity.
Participants also expect to see more product innovation from the insurance sector over the next five years. Fifty-one percent anticipate more innovation activity, while just 13 percent expect a decline.
Over half of the surveys candidates also expect opportunities for insurers in the pension risk transfer market, with 55 percent of IFAs expecting the appetite from defined benefit plan sponsors to transfer pension liabilities to insurers to increase.
The survey also highlighted which insurance sectors are expected to be the most innovative. Thirty percent of IFAs said health insurers, followed by 28 percent who said the life and pensions sector.
Martha Whitman, senior vice president and head of State Street’s insurance team in Europe Middle East and Africa, said: “The insurance sector is very reliant on intermediaries. As consumers increasingly need more help with their finances, the role of IFAs in the distribution of insurance products will remain pivotal.”
“Our findings provide a very interesting insight for insurers and their business partners. For example, 27 percent of IFAs said that over the next five years, they expect to place more emphasis on an insurer’s profitability before recommending their products to clients.”
