[Report] UK Distribution Landscape Market Research, Trends, Analysis TOC

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
  - Data
- 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
    - Life Assurance
  - 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

UK Distribution Landscape Overview 2006

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