A view to the future

previous icon De Smet envisions a number of developments in the insurance industry over the coming years. However, globalisation is not top of his list of concerns. He explains, “We are convinced, though it’s an opinion not shared by everybody, that insurance will remain a local business for a good number of years yet. When you see things like transactional banking that has become international. But the insurance business will stay local.”

Ageas Enjoys Change

“One of the reasons is that regulation is very country-by-country driven. The distribution modes are very specific in each country. Because of this complexity, there are almost no real cross-border IT systems. Any insurance company active in forty countries will have forty different IT systems. The cost to make a cross-border system is so huge that the benefits don’t compensate for the costs of doing so. That’s one given.”

However, De Smet does see the insurance industry following banking in one respect: “A second given is that we will see more regulation in the industry, as in the case of banking. There are two reasons for this. One is out of prudential concerns: after what happened in the financial sector, authorities want to be sure the industry is capitalised enough. Secondly, from a consumer protection point of view, there will be even more regulations to avoid miss selling. This will increase the information available to the customers, but it will also impact the way products are distributed.”

Whatever happens, De Smet believes Ageas has the tools to keep up. He says, “The third big element will be communication, which will have an important impact on distribution. We believe that a lot of consumers will still want to go to brick channels for advice, but you cannot look at this in an isolated way. Information gathering for insurance is increasingly done through the internet. Online quotations have started already and in some countries, such as the UK, this has been developed much more than in Belgium. However, the conclusion of the contract is still not done by these modern channels. This will, of course, evolve in the coming years. We do not believe it will be a sudden dramatic change - it will take some time - but for a group like us, it’s extremely important to follow these evolutions. We need to be strong in the markets. We don’t have to be the first movers, because that could cannibalise what we have today, but we need to be able to jump on the train when the train passes.”

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