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"In the current market fortune really could favour the brave, and other opportunities to drive value through acquisition are also starting to be played out."

Scott Paton, PA insurance EXPERT

Examining your position in the value chain

The fallout from the credit crunch and the imposition of new regulatory changes will present opportunities for insurers to exploit their position in the value chain – both organically and non-organically.

As an example, regulatory changes impacting the distribution of life and pensions products are causing insurers to re-evaluate their distribution capabilities. The Retail Distribution Review (RDR) in the UK is focusing the mind on which distribution models to take forward, coupled as it is with falling new business, lack of trust in traditional products and increasing costs for protection and annuities as a result of Solvency II. 

Some providers such as Friends and Standard Life, have significant shares in national IFA companies or networks, however they are now weighing up the strategy of buying distribution. Others are looking at the feasibility of building or rebuilding their own sales force of tied advisers to service the restricted advice market post-RDR.

In the current market fortune really could favour the brave, and other opportunities to drive value through acquisition are also starting to be played out.  These include the potential for geographic diversification - as RSA have chosen to do through the acquisition of Al Ahlia in Oman and GCAN in Canada.  Or the benefits of capital/cash generative diversification – as Allianz are planning to exploit through potential P&C acquisitions to fund growth of their life businesses. 

PA works with international clients to support value generation through the execution of organic and non-organic growth strategies. For more information or to discuss how to make your business fit for the future please contact us now.

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