About Density and Penetration of Life Insurance in Europe

Nicolas Michellod
Insurance Experts' Forum, March 30, 2010

We are currently looking at the life insurance market in Europe—more specifically saving and retirement solutions involving wealth management by insurance companies. In the frame of our initial work, we have tried to identify the differences between the main European markets comparing each of them in terms of density and penetration:



Life insurers have suffered since the financial crisis and the economic downturn, and it is difficult to predict what is going to happen to this market in 2010, and maybe in a longer period. But based on this analysis there are at least two observations that can be drawn in today’s context:

The unbalanced UK economy: Since the '80s and under Margaret Thatcher, the UK has operated a drastic shift in terms of economic focus, neglecting the industry to concentrate on financial services. This explains why life insurance premium represents more than 10% of the UK GDP right now. We believe that the lack of balance of the UK economy has been a major weakness recently, as it obliged the UK government to take drastic actions to help financial institutions in difficulty during the financial crisis at an unprecedented level in comparison to other European countries. The level of debt and deficits have worsened, and the strong emphasis in financial services remains a threat for the UK economy.

The bancassurance model does not bring the same success across geographies: Banks are the most important intermediaries in terms of life insurance distribution in Spain, France and Italy. However, it is important to point out that life insurance density is much higher in France than in Spain and Italy. This difference cannot be only explained by the difference in GDP ranking between these countries. Following our discussions with French insurers, we have noticed that the French bancassurance model remains an example worldwide, and it seems that Italian and Spanish insurers have not managed to take full advantage of the banking network to leverage potential synergies.

Our objective is to understand the differences between the main European insurance markets, and then anticipate how they might fare in the coming years taking into consideration the current macro-economic environment. There are plenty of uncertainties right now, but asking the relevant questions is already a good step toward the right direction.

This blog has been reprinted with permission from Celent. Nicolas Michellod is a senior analyst in Celent's insurance practice, and can be reached at nmichellod@celent.com.

The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

In the Big Data Era, Storage is More than 'Just' Hardware

For on-premises needs, the latest technologies, including flash, solid state drives, and in-memory computing offer new ways to provide rapid access to new data.

Core Transformation – The Ultimate Balancing Act

The core transformation journey requires companies to shift from reactive to proactive business models, incorporating maturing and emerging technologies, customizing and personalizing products, and accelerating speed to market while providing improved customer service.

Wearables Poised to Reshape Insurer-Insured Relationship

Boosted by the impending release of the Apple Watch, wearable devices have received a fair amount of attention recently Ė and with good reason. This emergent technology has the potential to alter the way the health insurance industry operates on a fundamental level.

Despite Valiant Efforts, Insurers' Consumer Ratings Drop

Insurers also are confronting waves of disruptive changes, including big data analytics, an aging population, ongoing economic uncertainty and the growing frequency and severity of natural disasters, which threaten to challenge and undermine businesses.

Why You Can't Take a Wrecking Ball to Your Legacy System

If you think of enterprises like collections of neighborhoods that need to be nurtured, you quickly see that architecture, not obliteration, is the key.

The Apple Bounce: Are Wearables Truly this Big?

I just donít believe it; only 720,000 Androidwear watches were sold in 2014. Apple has been amazingly successful in so many markets. Were they always first? No, a lot of products before. Were they always best? Again, no, superior devices have fallen.