AVON, CONNECTICUT, USA (May 4, 2005) – By the year 2020, most manufacturers (carriers) will provide both protection and fund management services. However, both will be highly competitive businesses where scale is vitally important. As such, there will be a continuing shake out among the remaining players.
According to a recently published white paper by Eastbridge Consulting Group, Inc. entitled The Future for Insurance Companies in the Benefits Arena—A 2020 Supplement, carriers will continue to evolve and develop over the years in response to changes occurring in the benefits environment (i.e., changes to buyers, products, distribution, and administration as described in Eastbridge’s original report, 2020: A Clearer Vision of the Future). The result, according to Eastbridge executives, will be the emergence of five general categories of manufacturers: niche manufacturers, vertically aligned manufacturers, multi-line manufacturers, money-manager manufacturers, and captive insurers.
“Over the next 10 to 15 years, the number of companies falling into each category will change significantly,” says Gil Lowerre, president of Eastbridge Consulting. “In 2005, vertically integrated insurance carriers (i.e., those that manufacture a variety of products, administer these products in-house, distribute through their own network of reps, and provide full services to all audiences) still dominate the industry. But as products become unbundled, employees become the primary benefits decision maker, mergers and acquisitions increase, and TPA/broker-dealer combinations naturally evolve, niche manufacturers (those that manufacturer a single type of product or a few closely related products) will emerge as the dominant category in 2020.”
“Multi-line manufacturers will also eventually disappear or morph into niche manufacturers as they find themselves subsidizing less successful lines with their ‘featured’ lines,” adds Bonnie Brazzell, Eastbridge vice president. As for captive insurers, they will play the same role in the benefits industry in 2020 as they do in 2005—providing risk management and insurance for an upstream owner. They will also be strong forces in the medical and life arenas.
The goal of both reports is to encourage readers to develop concrete opinions about the future of the benefits industry based on Eastbridge’s predictions and to take the appropriate steps to prepare for the future they envision.
Those who previously purchased the original report, 2020: A Clearer Vision of the Future, and Eastbridge’s Insight customers will receive a free copy of the supplement report, The Future for Insurance Companies in the Benefits Arena – A 2020 Supplement. Both the original report and supplement are being offered to new buyers as a package for just $750.
Eastbridge Consulting Group, Inc., is a marketing advisory firm serving insurance and financial services organizations in the United States and Canada. www.eastbridge.com.