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Life insurers shift strategies to target growing affluent & HNW markets, says Conning

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The increase in affluent and high net worth consumer segments has driven competitive response, resulting in both product and distribution shifts by life-annuity insurers, according to a new study by Conning.

"The increase in the numbers and wealth of Affluent and High Net Worth Investors represents a global opportunity for the sale of insurance and investment products," says Scott Hawkins, analyst at Conning. "Our analysis confirms that life insurers are competing for this opportunity by diversifying their products from protection into investment, and adjusting their traditional distribution to more effectively capture Affluent and High Net Worth Investors. This change in product mix to a greater reliance on annuities also lowers capital requirements, giving those firms an advantage in return on surplus."

The Conning study, "Life Industry Affluent & High Net Worth Strategies: Focus on Investments, not Protection”, reviews the subsectors of the high-end consumer market and analyzes the challenges and opportunities they present to the insurer. The study reviews the insurer responses to this growing segment, along with the longer term implications.

"In our global review of the Affluent and High Net Worth markets, insurers will need to differentiate their strategies to maximize their performance by market," says Steve Webersen, director of research at Conning. "For those pursuing developing and emerging markets with higher rates of growth, broadening distribution capabilities to capture more customers will likely be a key focus. Conversely, in mature and slower growth markets such as North America and Europe, fighting for a greater share of the Affluent or High Net Worth's wallet will be more important. Importantly, however, the High Net Worth and Ultra-High Net Worth segments are truly global markets, which favurs the large multinationals and changes the focus for many insurers."

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