Recent research from Lombard International Assurance S.A., a market leading provider of insurance-based wealth, estate and succession planning solutions for high net worth individuals, families and institutions, shows that European-based wealth professionals anticipate a huge wave of digitalisation across the Wealth Assurance sector with three quarters (75%) expecting a ‘high’ or ‘very high’ level of digitalisation over the next three years.

Published in mid-March 2021 and carried out in partnership with Accenture Luxembourg, the first of its kind European Wealth Assurance Report offers in-depth pan-European analysis of the Unit-Linked life insurance market, also known as PPLI or Wealth Assurance. The findings reveal that there is a clear need for improvement in digitally-supported services, in an increasingly tech-dependent social environment, if the sector is to remain relevant to its key stakeholders, composed of wealth professionals and their HNW clients.

Interestingly, the report reveals that there is significant variation in outlook between jurisdictions. Among respondents based in Belgium, nearly all (93%) say that they expect the Unit-linked life insurance market to experience either a very high or high degree of digitalisation over the next three years. France and Italy are also digital progressives with this figure rising to respectively 90% and 80%. It is UK-based professionals that are found to be the most uncertain about the level of digitalisation over the next three years, with 15% explicitly expecting a ‘very low’ degree of digitalisation – around three times the European average (6%).

Digital capabilities are high on the list when it comes to those key criteria which wealth professionals use when seeking to identify a suitable Wealth Assurance provider. The report found ‘digital servicing platforms and offering on digital channels’ ranked fourth - the top three being ‘fast and efficient partner services’, ‘good relationships and communication with the insurance company’s team’, and ‘technical expertise and knowledge’.

Technology’s key role as an enabler of service

But there remains some distance to go in the sector’s digital journey. When it comes to the quality of the current digital offerings from existing Wealth Assurance providers, wealth professionals are far from impressed. The overall satisfaction of the services available at the moment scored a unexceptional average of 2.89 out of a 5-level rating (5 being ‘very satisfied’). In particular, it is simulation tools and smartphone applications which appear to be areas that are most lacking. Those wealth professionals based in France and Portugal are the most satisfied, scoring the digital service offering they receive as 3.5 and 3.6 out of 5 respectively. This does however show there is still work to be done.

The report also underscores the fundamental role that technology has in enabling and ensuring better service, high security, and a more mobile experience. Across European-based wealth professionals, when asked to identify which technologies they viewed as most important, respondents identified ‘customer service technology’, ‘cyber security’, and ‘mobile technologies as the top three’.

Hunger for digitalisation remains

A consistent theme throughout the report is the crucial part that digitalisation is set to play in the Wealth Assurance industry’s evolution. The views of wealth professionals regarding the development of further offerings from Wealth Assurance providers place an emboldened digital offering at the forefront. When asked about additional services that Unit-Linked life insurance providers should offer, almost one in five (22%) identified ‘digital client onboarding/e-applications’ as their preferred option, while ‘needs-based innovative solutions’ came in second (18%). Digitalisation once again comes to the fore in their third priority, with a requirement for‘digital solutions to reduce acquisition costs and increase broker productivity’ (16%).

 

The European Wealth Assurance Report

The European wealth professionals’ perspective on Wealth Assurance, also known as Unit-Linked or Private Placement life insurance, as a wealth and succession planning tool.

 

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The survey was translated and distributed in seven different languages and sent to active wealth professionals across Europe. Composed of 24 questions and divided into 3 sections, the survey aimed to anonymously collect, analyse, and detail views and opinions to provide an overview of how insurance-based wealth planning solutions are perceived, used and considered across Europe, now and in the future.

The survey, carried out in partnership with Accenture Luxembourg, was in the field between 15 September 2020 and 31 October 2020, generating a sample size of 677 across 12 jurisdictions. As respondents were given the opportunity to skip some questions, the number of answers vary across the survey.

The top 5 geographical locations were Luxembourg (21%), Switzerland (15.3%), France (14.2%), Italy (13.8%) and Germany (9.4%). This resulting footprint is consistent with Lombard International Assurance’s footprint and network of trusted partners in Europe, which includes private bankers, independent wealth and financial advisers, insurance brokers, family officers, independent asset managers, and tax lawyers serving the needs of high net worth clients and families.

N.B. In those questions where respondents were asked to rank choices, a scale was offered, with 1 being the most important and 10 being the least important.