Anyone who has had to insure their car recently will have noticed how much competition there is between underwriters for new business. Premium discounting is a regular feature of the general insurance landscape – and recently it has been driven by new entrants to the market.
But such explicit price competition seems to be much less prevalent in the risk insurance world. Competition between life insurance companies is more complex, and more subtle.
It’s rare for any single company to stand out a mile from the pack on pricing alone; it’s service and product features that differentiate one insurer’s products from another’s. Service is intangible, in many ways. It is invariably built on a solid technology foundation, but as Duncan West, executive general manager of insur- ance for MLC, says, technology is an enabler, but it’s not a differentiator.
West says technology merely facilitates service – and it’s on service that companies compete. Competition on service and product features still requires some imagination and a deep understanding of the needs of advisers.
Andrew Vasko, head of the insurance industry consulting firm IntelliSure, says that “if we leave aside technology as a separate topic, and just look at the big picture”, competition comes down to two things.
“It’s the product that they can offer to advisers, or the customers of advisers; and second, it’s the process that they put in place to support two areas – one is the application process, and the other one is the claims process,” Vasko says.
“Fundamentally these are two areas where they can differentiate from each other.”
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