UK - Massive industry consolidation will mean that the life and pensions market will be dominated by just four or five players by 2008, research by management consultancy Bain shows.
The research found that this handful of life assurers will control over 60% of new premium income and that multi-tied panels will be dominated by these firms.
Bain partner Christopher Hopton explained: “What we’re seeing is an increasing pressure from regulatory compliance compounded by widespread problems, particularly for those remaining smaller insurers in the market.
“The future of the industry will be driven by changes to distribution and margin pressure, which will lead to concentration.”
Hopton believes that the leading players will be characterised by their strong brands, their ownership of a full range of investment products, their near-monopoly on the multi-channel distribution sector.
He concluded: “In terms of the names that we expect to dominate the UK life and pensions market over the medium-term, we predict that when the dust has settled, the Pru, Norwich Union, Standard Life, BoS and L&G will still be standing.
“For the rest, it’s time to realign their strategy with the changing landscape.”
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