In 2008, Europe was the most important region for insurance and a single European Market for insurance will be brought a step closer by EU Solvency II, offering enormous opportunity for pan-regional players
Emerging markets are expected to grow at twice the pace of developed markets, while still making a much less significant contribution to overall performance – the potential value of BRIC markets, is leading to a dual operating model for organisations straddling mature and emerging markets, to ensure control and scale alongside localised tailored approaches
The dual operating models present challenges to existing structures and need to work towards regionally and globally integrated operations with stronger divisional and group/corporate functions;
In response to concerns over investor confidence, analysts anticipate a shift from revenue growth and return on equity to balance-sheet strength, robust risk management and operational efficiency;
Whilst corporate ability to assess risk accurately is an operational imperative, and factors such as efficient back-office processing functions become increasingly critical, the business–customer relationship is central
Pressures for transparency are coming from both regulatory bodies and consumers – driven by the internet’s ability to highlight individual customer experiences and generate negative reviews;
Financial institutional relationships are coming under increasing scrutiny, driven by events such as Lehman Brothers and the sub-prime crisis
Consolidation offers insurers scale, synergies as well as new sources of revenue, although the emergence of global insurance brands – with penetration into Europe by US insurers and into LatAm and AsiaPac by European insurers – presents challenges around differentiation and category perception, as domestic insurers are replaced and rebranded
The dual business operating model required to compete in mature and emerging markets also requires a differentiated model for consumer relations
Proliferation of products and distribution channels, including online, retail sales of insurance policies through non-specialist staff, such as retail banks; and new channels, such as supermarkets and worksite marketing; all dilute the relationship between customer and insurer
With the added pressure of commoditisation arising from online price comparison sites, customer churn has increased significantly and the longer customer relationships enjoyed by the industry in the past are under threat: customer activity in mature markets is likely to shift to improving retention (‘persistency’ in life companies)
Where then is the relevance of sponsorship?
Just as a website is always, ultimately, an online reflection of an organisation, major sponsorships are – for better or worse – the real-world equivalent.
The choices major sponsorship imposes inevitably touch on structure, on value proposition, on customer relationship, on brand, on performance – on every aspect of organisational behaviour.
Our sector paper therefore considers the opportunities and challenges facing the industry – and the role that sponsorship might play in reflecting a response to these.
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