Expat policyholders are attracted to offshore centres because they offer better governance, political stability, neutral or low tax regimes and a more familiar legal system than the countries they are working in.
What is the impact of technology on the industry and advice?
There will always be a place for face-to-face advice. However, technology will enable the advice process as opposed to replacing it.
For the younger generation, technology is part of their lives and they will see its use as fundamental to their buying process.
You will see a definite shift to clients being more comfortable with technology and advisers benefiting from technology.
Much has been written about robo-advice, but it isn’t sounding the death knell for the face-to-face adviser. In most cases, robo-advice will be used to support advisers giving face-to-face advice by helping them deliver the needs-based solutions clients want.
The days when life companies had large storage houses full of files have gone. Now, some life companies do not even use scanned documentation because they have electronic applications to deal with each aspect of the process.
So, we have migrated from paper storage to microfiche, and from scanning to pure electronic data. You have also got expert underwriting systems now, that allow life insurance to be processed much quicker than they would have done in the past.
Will products stay the same or become more complex?
Products could become more bespoke using the vast amount of personal data that is now available, so truly meeting event-driven needs.
For products that are being sold directly, you could see a more simplified versions or even menu-based products, where an adviser can match riders to a client’s needs.
What is Ailo’s view on the current scale of regulatory change?
The life insurance industry is very robust and there are always going to be people who die too soon or live too long, which is what our products are designed for, and that hasn’t changed and will not change.
If you distil what regulation is endeavouring to do, it is fundamentally trying to improve the quality of advice and protect the policyholder. The majority of regulation is sensible, appropriate and relevant.
It is just that a small percentage of the regulation introduced can be unworkable within the timescales set, for example, the key information document in the packaged retail investment products legislation in Europe.
How about elsewhere in the world?
Currently there is no global regulation of the life insurance industry. Not every regulator is implementing everything at the same time, so this has led to different levels of regulation in different countries.
Some emerging markets – Hong Kong, Singapore, UAE – are coming pretty close to the developed world in terms of their regulatory regime. However, many frontier countries are understandably further back.
About AILO
The Association of International Life Offices (Ailo), established in 1987, represents the interests of the cross border life industry.
It is registered in Guernsey and its secretariat is in Brussels. Its key objectives include representing its members’ interests to legislators, regulators and other trade bodies; encouraging professionalism; and to provide a forum for networking and knowledge sharing.
Membership jurisdictions include Isle of Man, Channel Islands, Dublin, Luxembourg, Cayman and Bermuda as well as informal groups meeting in Hong Kong, Dubai and soon Singapore.
It has associate members representing third-party administrators, reinsurers, software houses and management consultancies; and intends to expand this category.
It is planning to introduce an affiliate membership to link with other like-minded associations globally.
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