Insurers should go into partnership with employers, says Watson Wyatt
Health insurance and other health-related protection offer the greatest growth potential for distribution partnerships, claims financial management consult- ancy, Watson Wyatt.
In its 2003 Affinity Report, the firm highlights the significance of product providers partnering with employers and employee-based organisations, such as trade unions, to help increase sales.
Frank Fletcher, senior consult- ant at Watson Wyatt and author of the report said the growth potential has been heightened by problems in other areas of the industry. 'Health insurance products are akin to employee benefits and their importance is being thrown into sharp relief by the decline of defined benefit pension arrangements that often include provision for life cover and income in times of ill health and disability,' he said.
Fletcher warned the growth of non-traditional distributors, such as retailers could pose a threat to the adviser community.
'Advisers need to ensure they maximise all business potential by addressing the individual needs of their corporate clients as well,' said Fletcher. 'Plenty of organisations use an IFA-based approach to selling these products, so there is more potential there.'
'However, the capacity for retailers to sell health and life products has increased signifi- cantly over the last three years with retailers being successful in the general insurance market. And this could pose a threat to advisers,' he said.
Scottish Equitable was one insurer to back the findings. Lesley McPherson, spokesperson for AEGON UK, said: 'There is no doubt that distribution of financial products is changing and in the future we will see a range of different strat- egies emerging.'
