Aviva | Sector Overview

INSURANCE

sector Overview:

Within the insurance sector there is scope to utilise the latest technology to introduce innovative ways of providing cover for customers. However the challenge for the insurance industry is to keep abreast of emerging changes and quickly respond by developing new products and services that are both relevant and cost-competitive. Whilst other segments of the financial services industry are moving ahead in terms of proactively scanning their environment and even appointing dedicated innovation executives, there is little evidence that the insurance market is changing in this direction. This is an oversight as the opportunities for those that do embrace a more innovative mindset, especially in the younger segments, will be enormous.

Some insurers are aiming to break out of more traditional ways of working by looking beyond technology enablement to developing different business models and different ways of presenting their products: Prudential, for example, offers no-claims discounts on home insurance in the same way that they are offered on motor insurance. In a bid to change consumer behaviours, the same company also provides discounts for health insurance tied to gym membership. 2007 was a challenging year for many in the financial services industry and this affected the insurance sector just as much as the large lenders. Time will tell whether this will have a positive effect on innovation as companies seek to recover lost profits and fuel future organic growth.

ONES WE ARE WATCHING

Munich Re
Munich Re Group is one of the world's largest re-insurers and the second-largest primary insurer in Germany. In common with other sectors the company has an Innovative Solutions Team which recognises trends, analyses markets and works across all divisions to come up with solutions for the future. In January 2008 Munich Re announced a record profit of €3.9bn for 2007 on the basis of key preliminary figures and is set to continue accruing benefit from continuously looking to the future and trying to understand how the world will change and why.

Allianz
The Allianz Group is one of the leading global services providers in insurance, banking and asset management. Innovation at Allianz is firmly embedded in the company's strategy: It is a key element in feeding the strategic pipeline for the long term and supporting the initiatives that are driving profitable growth. Allianz's group-wide innovation initiative, ‘ideas to success’, was launched in 2006 and generated over 28,000 ideas in its first year. Allianz is starting to see financial benefits from 'ideas to success' and are looking to bring innovation into all business areas and implant it into the DNA of the company.

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