Zurich's Geoff Riddell vision links insurers directly with insureds

Zurich Financial Services UK ISA general insurance chief executive Geoff Riddell predicted that, by the year 2013, there will be only "ten or so quality provincial brokers remaining in the UK".

But he qualified his remark by saying that, in the opinion of many others in the industry, there may be even fewer.

Riddell also predicted that it would be the norm for brokers and carriers to be directly linked to insureds' financial systems within the next decade.

He said the new structure would ensure that "policy documents would, in future, be issued before binding".

Riddell's remarks formed part of a speech in which he outlined his vision of how the insurance industry would develop over the next ten years.

He forecast major changes in the way in which insurance will be distributed.

While Riddell expected direct insurers to remain in "rules-based" underwriting areas, he predicted "many direct players will struggle to cope with competition from comparator engines".

Riddell's other predictions included:

  • Personal lines will be dominated by affinity and proposition aggregator partnerships
  • In most countries the top five carriers will control 85% of the market
  • New insurances will emerge such as a privacy intrusion (with a resulting explosion in CCTV) and fidelity, which will become the critical cover for both companies and individuals
  • Traditional insurances will be in decline with only 'fault and failure' remaining in motor insurance, while theft insurance will be virtually eliminated by voice keys and sophisticated tracking devices
  • Riddell added that corporate governance will be a key focus with regulators and compliance would become "more onerous".

    "Regulators' focus on products will transfer the distribution of power to increasingly dominant distributors," he said.

    "Only the large players will survive because of capital requirements."

    Technological advances would also permanently change industry relationships, said Riddell.

    "Insureds, brokers, carriers and other advisers will operate in a fully interfaced, open architecture, easy-access-to-data-world."