The BBC article, see link at the end of this post, published last week give a lovely high level analysis of why current banking models are at risk from changes in consumer behaviour being wrought by technology. The question that came to my mind as I read this article was “as goes banking so goes insurance”?
The Digital Insurer has a view on this (see the Digital Advisor article). However, it strikes me that the sands are moving very quickly and non-financial services players could move against incumbents. Perhaps incumbent insurers should be looking for JV’s with such players more aggressively – the old adage being it is better to cannibalise your existing business rather than becoming someone else’s lunch!
I remember having heated discussions with “agency only” executives in Asia-Pacific only 10 years ago about the potential of bancassurance. The insurance execs who missed that trend are no longer around and their successors are still playing catch up – with many having to use scarce capital to buy bank relationships with pretty thin margins.
I’d be interested to hear your views and opinions on one of the central strategic questions facing life insurers in Asia: can existing business models be transformed in parallel with the creation of completely new distribution channels?