The Washington, D.C.-based Insurance Advisory Board (IAB) has announced the publication of its most recent research – “Insurance for the Masses: Achieving Profitable Growth in Mass Markets.”
The IAB is a membership program of the Corporate Executive Board, a leading provider of best-practices research and quantitative analysis, serving insurance and bancassurance executives throughout the world. The study, in which IAB said 80 corporate executives participated, identifies substantial opportunities in the mass market, catalogs the industry’s shortcomings in capturing those opportunities and presents proven strategies to tap the market’s potential profitably.
“The mass market’s risk protection needs are greater than ever,” stated Mike Kostoff, Executive Director of the Corporate Executive Board’s financial services practice. “A number of coverage gaps are widening as risk is shifting to individuals. In death protection alone, the revenue potential in the U.S. is around $150 billion and in the U.K. more than £20 billion [$37 billion]. Further, it will only increase as many nations struggle with the high cost of aging populations.” The study establishes that most insurers have been unable to capture this opportunity profitably, demonstrating that life insurers in particular have been forced to exit the market as a result of the high cost of their business system.
To reconnect with mass-market customers profitably, insurers must recognize that their product and distribution strategies cannot simply be different in degree from traditional approaches but different in kind. “Traditional products sold via traditional agent channels have become too expensive for the mass market,” Kostoff indicated.
The best-practice case studies are available exclusively to IAB members. Additional information on the Council’s research is available at www.insuranceadvisoryboard.com.
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