Table of Contents
- EXECUTIVE SUMMARY
- Distribution Landscape
- Snapshot of distribution channels
- Provider landscape
- Distribution Trends and issues
- The Future Decoded
- CHAPTER 1 UK DISTRIBUTION LANDSCAPE PRODUCT SUITE
- UK Distribution Overview 2006
- UK IFAs 2006
- UK Bancassurance 2006
- CHAPTER 2 INTRODUCTION AND METHODOLOGY
- Scope of the report
- Report structure
- CHAPTER 3 DISTRIBUTION LANDSCAPE
- Introduction
- Key findings
- Channel definitions for the distribution of life and pensions
products, 2006 onwards
- IFA/whole-of market advisors
- Multi-tie financial advisor
- Single tie (other than bancassurance)
- Single tie bancassurance
- Multi-tie bancassurace
- Non-intermediated
- IFAs still dominate the life and pensions distribution market in the UK
but bancassurers have gained market share
- Pensions account for 58% of IFA sales in the total life and pensions
market in 2005
- The single and regular premium pensions markets continue to show
positive growth, reflected in increased sales through IFAs
- Personal pensions accounted for almost half of total IFA single
premium pensions business in 2005
- IFAs have almost quadrupled sales of SIPPs since 2004
- Group personal pensions account for 56% of IFAs' regular premium
pensions new business
- Single premium sales dominate the life market, but bancassurancers
have overtaken IFAs in regular premium sales
- Unit linked bonds remain the leading product in IFAs' single premium
sales as with-profits bonds continue to decline
- Term assurance accounts for more than three quarters of regular
premium sales through IFAs
- Unit trusts and OEICs sold by IFAs
- Unit Trust and OEIC sales are vital to IFA business
- IFAs now account for over three quarters of unit trust and OEIC sales
in the UK
- Life products account for 84% of bancassurance sales in the total life
and pensions market in 2005
- Bancassurers have seen more growth in single premium life than regular
premium life sales in the last two years
- Unit-linked bonds and ditribution bonds sales via bancassurance have
risen in 2005
- Contrary to market trends and expectations, bancassurers have
significantly increased sales of mortgage related products in 2005
- Bancassurers are selling more regular premium pensions than single
premium pensions
- Stakeholder pensions remain by far the most popular form of regular
premium pension in bancassurance
- Single-tie distribution is on a decline while non-intermediated sales
have shown moderate growth over the last five years
- Regular premium life is the most important product category for the
non-intermediated distribution channel
- Single premium pensions are the only product category where the
single-tie distribution channel has experienced growth
- The non-intermediated distribution channel has experienced slight
growth in sales of regular premium pensions in the last five years
- Data Tables
- CHAPTER 4 SNAPSHOT OF DISTRIBUTION CHANNELS
- Introduction
- Key findings
- The UK IFA market is comprised of a varied mix of small, medium and
large sized firms
- The total number of IFA firms in the UK has increased since 2005
- The number of network member firms has declined by almost 20% since
2003
- Total IFA firm turnover increased by 9.6% between 2005 and 2006
- Sesame has recovered the ground it lost in 2005, and retained its
position as the largest UK IFA network
- The top 20 IFAs have increased their market share, but still account
for less than a third of total turnover
- The largest bank is not automatically the largest bancassurer
- Barclays is the bank with the largest branch network in the UK but
it' s not the largest bancassurer
- HBOS is the dominant player in the UK bancassurance market
- Life and Pension advertising expenditure in bancassurance
- Non-traditional distributors originate from various industries
- From ASDA to Virgin - all want a share of the UK financial market
- Retailers have continually widened their financial services offering
- Tesco Personal Finance
- Sainsbury' s Bank
- The Post Office
- Selection of other non-traditional players in financial services
- Online distribution will become increasingly important in the future
- Life and Pension advertising expenditure in non-traditional distribution
- Data Tables
- CHAPTER 5 PROVIDER LANDSCAPE
- Introduction
- Key findings
- The life and pensions market in the UK is highly competitive
- Depolarisation has led to a diversification of distribution channels
- Norwich Union has the strongest market share position in the UK
- In 2005 life insurers spent more than GBP40m on advertising
- Providers and distributors spent most on advertising life insurance
in 2005
- HBOS recorded highest sales of single premium life products in 2005
- Legal & General recorded highest sales of regular premium life
products in 2005
- Aviva recorded highest sales of single premium pension products in 2005
- Standard Life recorded highest sales of regular premium pension
products in 2005
- An increasing number of providers offers products online
- Data Tables
- CHAPTER 6 DISTRIBUTION TRENDS AND ISSUES
- Introduction
- Key findings
- Depolarization has not had the effect originally anticipated
- IFAs do not see a radical shift following depolarization and remain
confident
- Depolarization may benefit the bancassurers on the longer term
- Most non-traditional distributors offer products from one provider
- Providers seek to expand and diversify their distribution strategies
- Barclays has entered strategic partnerships with Standard Life and
UBS
- Legal & General keeps a strong position despite Barclays going
multi-tie
- Aviva is looking to expand life and pensions business online and
abroad
- Friends Provident, Axa, and Scottish Widows review and expand
distribution
- FSA sets out priorities for its review of UK retail distribution
- The FSA wants to be the catalyst for change in retail distribution
- IFAs prepare to defend their business model
- FSA pulls new products under its control
- Non-traditional distributors struggle, with varying success
- In non-traditional distribution the customer initiates the purchase
- Some experts question the suitability of non-traditional distributors
- Providers seek to explore the potential of worksite marketing
- Despite promising potential, opinions among experts are divided
- CHAPTER 7 THE FUTURE DECODED
- Introduction
- Key findings
- IFAs will remain the dominant life and pensions distribution channel in
the UK
- Multi-tie distribution will see strong single premium pensions sales
- The regular premium life market will decline in the next five years
- SIPPs are expected to drive IFAs' single premium pensions sales
- IFAs account for the vast majority of regular premium pensions sales
- Data tables
- APPENDIX
- Definitions
- Single premium policy
- Regular premium
- New business
- Wrap accounts
- Life based savings products
- Life Product Definitions
- Single Premium Life
- With-profit bond
- Guaranteed Equity bonds
- Distribution bonds
- Purchased Life Annuities
- Other bonds
- Annual Premium Life
- Endowment Policy
- Term Assurance
- Income Protection
- Critical Illness
- Collective Life
- ISAs
- Pension product definitions
- Personal Pensions
- Stakeholder Pensions
- Group personal pensions
- DSS Rebates
- Employer Sponsored Stakeholder pension (ESS)
- SIPPs (Self Invested Personal Pensions)
- FSAVC (Free-Standing Additional Voluntary Contributions)
- ABI definitions of distribution channels
- Independent Financial Advisors (IFAs)
- Direct sales forces
- Tied agents
- Multi-tied agents
- Bancassurance
- Direct marketing
- Telesales
- Other
- Matrix-Data
- Notes to IFA Firm categorizations
- Forecasting methodology
- Regression analysis is unsuitable for Life and Pensions forecasting
- Datamonitor uses a qualitative forecasting methodology for Life and
Pensions
- Further reading
- Savings and Investments SPP
- Interactive Databases
- Reports
- Briefs
- Life and Pensions SPP
- Interactive Databases
- Reports and Briefs
- Financial Advice Market SPP
- SPP writing team
- List of Tables
- Table 1: Total UK life and pensions sales by segment, 2000-2005
- Table 2: Total UK IFA life and pensions sales by segment, 2000-2005
- Table 3: Total life and pensions market segmented by distribution
channel, 2001-2005
- Table 4: Total life and pensions sold through the IFA channel,
2000-2005
- Table 5: Sales of life new business premiums through the IFA channel,
segmented by single and regular premium, 2000-2005
- Table 6: Sales of pensions new business premiums through the IFA
channel, segmented by single and annual premium, 2000-2005
- Table 7: Sales of life new business single premiums through the IFA
channel, segmented by product type, 2004-2005
- Table 8: Sales of life new business regular premiums through the IFA
channel, segmented by product type, 2004-2005
- Table 9: Sales of pensions new business single premiums through the
IFA channel, segmented by product type, 2004-2005
- Table 10: Sales of pensions new business regular premiums through the
IFA channel, segmented by product type, 2004-2005
- Table 11: Total gross retail sales of unit trusts and OEIC products,
2004-2005
- Table 12: Total life and total pensions business sold through the
bancassurance channel 2001-2005
- Table 13: Sales of life products through the bancassurance channel
2001-2005
- Table 14: Single premium life product sales through the bancassurance
channel segmented by product type 2004 - 2005
- Table 15: Regular premium life product sales through the bancassurance
channel segmented by product type 2004 - 2005
- Table 16: Sales of pension products through the bancassurance channel
2001 - 2005
- Table 17: Regular premium pensions product sales segmented by product
type 2004 - 2005
- Table 18: Single premium pensions product sales segmented by product
type 2004-2005
- Table 19: Network members by number and by turnover, 2002-2006
- Table 20: Distribution status of top banks and building societies, 2006
- Table 21: Life and Pension advertising expenditure in bancassurance
2005
- Table 22: Life insurance and savings products offered by Tesco
- Table 23: Life insurance and savings products offered by Sainsbury' s
- Table 24: Life insurance and savings products offered by the Post
Office
- Table 25: Selection of other non-traditional players in financial
services
- Table 26: Life and Pension advertising expenditure in non-traditional
distribution 2005
- Table 27: Total number of IFA firms in the UK segmented by type,
2005-2006
- Table 28: Gross annual turnover of IFA firms segmented by type,
2005-2006
- Table 29: Average annual turnover per IFA firm, 2005-2006
- Table 30: Top 20 IFA firms (including networks) by turnover, August
2005 to July 2006
- Table 31: Life and Pension advertising expenditure of UK insurers 2005
- Table 32: Major UK insurance companies' online product offer 2006
- Table 33: UK Top 5 providers' new business sales of life and pensions
products 2005, GBPm APE
- Table 34: New business sales of single premium life products 2005,
GBPm APE
- Table 35: New business sales of regular premium life products 2005,
GBPm APE
- Table 36: New business sales of single premium pension products 2005,
GBPm APE
- Table 37: New business sales of regular premium pension products 2005,
GBPm APE
- Table 38: UK Life and Pension advertising expenditure, 2001-2005, GBPm
- Table 39: Total life and pensions market segmented by distribution
channel, 2006f-2010f
- Table 40: Single premium life market segmented by distribution
channel, 2006f-2010f
- Table 41: Regular premium life market segmented by distribution
channel, 2006f-2010f
- Table 42: Single premium pension market segmented by distribution
channel, 2006f-2010f
- Table 43: Regular premium pension market segmented by distribution
channel, 2006f-2010f
- List of Figures
- Figure 1: Bundling structure of UK Distribution Landscape 2006
- Figure 2: Report structure of the UK Distribution Landscape 2006 report
- Figure 3: IFAs are still the most dominant players but banks catch up
- Figure 4: Pensions have been the dominant product in the total life
and pensions market since 2001
- Figure 5: The value of single premium pension sales through the IFA
channel has grown by 12% since 2004
- Figure 6: Personal pensions account for 44% of total single premium
pensions new business sold through the IFA channel in 2005
- Figure 7: Group personal pensions accounted for 56% of total regular
premium pensions new business income sold through the IFA channel in 2005
- Figure 8: Single premium life business has continued to see strong
growth since 2004
- Figure 9: Unit-linked bonds now account for over 80% of total single
premium life sales
- Figure 10: Term assurance accounts for over 75% of regular premium
life sales through IFAs
- Figure 11: Unit trust/OEICs account for around 60% of total IFA life
and pensions sales
- Figure 12: IFAs have handled over 60% of unit trust and OEIC sales
since 2001
- Figure 13: Sales of life products show strong recovery while pensions
business is stagnating
- Figure 14: Bancassurance did not suffer as badly as other distribution
channels between 2002 and 2003
- Figure 15: Bancassurers saw more growth in single premium life than
regular premium life business in recent years
- Figure 16: Unit-linked bonds and distribution bonds sales increased in
2005, contrasted with the decline of guaranteed equity bonds
- Figure 17: Contrary to market trends, bancassurers have significantly
increased sales of mortgage related products in 2005
- Figure 18: Bancassurers' sales of regular premium pensions have broken
the downward trend in 2005
- Figure 19: Stakeholder pensions remain by far the most popular form of
regular premium pension in bancassurance
- Figure 20: In 2005, stakeholder pensions emerged as most popular form
of single premium pension in bancassurance
- Figure 21: Sales of single premium life products through the
single-tie channel declined strongly in the last five years
- Figure 22: The non-intermediated distribution channel sees largest
sales in regular premium life sector
- Figure 23: Single premium pensions represent the only product category
where the single-tie channel has seen growth in 2005
- Figure 24: Sales of regular premium pension products through the
non-intermediated channel have shown an increase in 2005
- Figure 25: Single outlet firms have increased significantly since 2005
- Figure 26: Network members have significantly declined since 2003
- Figure 27: Total IFA turnover increased by 9.6% between 2005 and 2006
- Figure 28: Network members have seen a significant decrease in average
turnover per firm since 2005
- Figure 29: Sesame maintained its position as the largest UK IFA firm
in 2006
- Figure 30: Barclays has the largest branch network of all banks and
building societies in the UK
- Figure 31: HBOS is the dominant player in the UK bancassurance market
- Figure 32: A number of non-traditional distributors have entered the
UK financial services sector in the last 10 years
- Figure 33: UK' s major insurers are increasingly seeking to diversify
their distribution strategies to reach a broader customer audience
- Figure 34: UK' s top 5 providers control almost 50% of the total UK
life and pensions market
- Figure 35: In terms of advertising, financial companies spend
significantly more on life insurance than pension products
- Figure 36: HBOS recorded highest sales of single premium life products
in 2005
- Figure 37: Legal & General recorded highest sales of regular
premium life products in 2005
- Figure 38: Aviva recorded highest sales of single premium pension
products in 2005
- Figure 39: Standard Life recorded highest sales of regular premium
pension products in 2005
- Figure 40: IFAs will remain the most dominant distribution channel in
the UK in the next 5 years
- Figure 41: Multi-tie advisors and multi-tie bancassurers will see the
greatest increases in terms of sales in the next 5 years
- Figure 42: The regular premium life market will see a slight decline
in the next five years
- Figure 43: SIPPs are expected to drive IFAs single premium pensions
sales in the next five years
- Figure 44: IFAs account for the vast majority of regular premium
pensions sales
- Figure 45: "Quasi-Delphi" forecasting technique
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