Reporting from Scotland Scottish life's product marketing manager John Joe McGinley and Standard ...
Reporting from Scotland
Scottish life's product marketing manager John Joe McGinley and Standard Life's marketing development manager Gerry Warner both predict changes to the line-up of top-selling products this year.
Last year was very much one of group pensions, McGinley says, but 2002 "is the year of the individual pension" .
He also believes that the transfer market will be interesting.
Pensions and divorce will also remain a strongly growing business for Scottish Life, which sees opportunities for IFAs to drum up business by linking with the legal profession where clients need financial advice in divorce cases.
There are 180,000 UK divorces annually at present, McGinley says, and given the rules on how pension assets must now be regarded - and divided - by the courts there should be scope for a massive amount of new business for IFAs.
Scottish Life will also be launching itself into the protection market by the summer this year.
Final market research and construction of the products is still ongoing at present, which means details are not yet available, however, Scottish Life does say it wants to avoid the "mistakes" previously encountered by product providers launching into this market.
Standard Life's Gerry Warner says much of last year was about with-profits bonds and stakeholder, but this year there will be opportunities in business assurance and measures affecting underwriting.
Standard Life is gearing up to implement an "intelligent underwriting" system to further move away from a paper-based environment towards an electronic system that will automate a significant part of the sales process.
This is not to say the role of the IFA will be diminshed, but simply that customers will be able to provide answers to questions without the need to write on paper forms - for example, on questions about previous medical history, used by all companies to determine risk.
"It is like an engine for identifying medical conditions," Warner says.
He adds that emphasis on electronic solutions is likely to increase because of the commoditisation pressures in areas such as term assurance, as pricing levels in the market cannot go much lower - there is evidence they are already bottoming out, he adds - and companies will increasingly be regarded on their service differentiation rather than just price.
"A typical £100,000 policy for a 25-year-old is currently around £6. That does not leave much margin," adss Warner.
Standard Life is certain the business assurance launch of last June will this offer significant scope for IFAs to cross-sell, as it is now possible to match discussions on stakeholder with proposals on business assurance to cover key employees without whom the business would find it difficult to function.
Standard Life will also look to launch a new mortgage protection product in May this year, although details on how that will look are not being released just yet.
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