There is no one simple step to success. Although set to grow considerably, this is a mature market and many of the larger players have refined their strategies considerably. Many of the conventional measures to improve performance have been taken. What is now needed is a more fundamental rethink of the life company's modus operandi - not necessarily to change its strategic direction, but to transform its basis of competing in the market. To do this means answering the dilemma of how to maximize returns while supplying a product that is being rapidly turned into a commodity in a highly competitive market, where distribution is often controlled by others.
Forces driving change Before seeking to answer the dilemma, let's look at the forces driving change.
Increasing sophistication and empowerment of consumers will demand new responses from life and pensions suppliers, in particular the service they provide, product tailoring and the way they manage compliance. Technology will play an important role in enabling consumers to access financial providers, leading to a change in the distribution patterns. Changing patterns will reduce direct regulation of insurers, but place increasing emphasis on regulating market conduct. There are some fundamental differences in the way the leading life Insurers of tomorrow think and act. Tomorrow's insurer recognizes that it operates in the retail financial marketplace and will chose where in that market to compete.