STEP - Social, Technological, Economic and Political
This STEP analysis seeks to identify and assess the external drivers of change
that will have an influence on the insurance marketplace and industry.
e.g. we are all living longer; most will need some form of nursing care in
old age; more people are living alone or in small family units; women are
more likely to have to support themselves; we have more active but riskier
What sort of Technological Advances
will impact the way we live and work?
e..g. medical advances are making us live longer and are minimising the impact
of disabilities; the global wired society will soon be realised and could
fundamentally impact all knowledge based work; information technology will
permeate the home and the car etc..
What Economic Trends could
these changes create?
e.g. booming economy but cautious consumers; increasing globalisation and
opportunities overseas balanced by active foreign competition at home; increasing
competition as retailers enter financial services, often using new technology;
shortage of skills; the end of mass production and mass marketing.
e.g. they will only provide the very basic level of pensions and benefits;
many government interactions will be electronically based, thus making many
citizens familiar with information technology; government will encourage
citizens to make their own arrangements with the private financial sector;
the financial sector will be increasingly regulated; a new all embracing
Financial Services Authority (FS) will be in-place during 1999.
The future is likely to be fast changing, unpredictable,
somewhat chaotic, but above all, demanding for consumers and suppliers
Concurrent and fast changes in society are fueling
fundamental paradigm shifts. Whilst at a
macro level, some aspects of the future are clear, for example an aging
population and globalisation; at a micro level customers and businesses face
an unclear future. Life is becoming more
complex and there are some difficult choices to make.
Citizens will no doubt have
to take more responsibility for life's ups
and downs. They will need to take both short term and long term financial
decisions. To do this effectively they will need to
become more knowledgeable about changing government policies,
to gain an understanding about a wider range
of financial products, adept at risk
management and probably more skilled with
The financial services industry will have a role to play, supported by the
government but at the same time regulated to protect the consumer. More financial
services suppliers are seeking to help
consumers and to meet their needs, but at the same time,
consumers are becoming cautious and
Financial Services Industry
a wider range of products and services.
new distribution channels, particularly in direct
a heavy promotional program, particularly in discounted
products and services.
ruthless cost cutting and development of low cost
mergers and acquisitions to gain economies of scale.
All these initiatives are producing benefits but in many cases there are
limits, and in other cases efforts are simply counter balanced by copy-cat
action by competitors. For example:
hundreds of similar looking product variations confuses
channel conflict can lead to attrition before the
new channels are fully developed.
cost cutting has finite limits unless products
are sold below the risk cost.
mergers and acquisitions have limits when governments
or the EU disallow them for monopoly reasons.
promotional incentives have diminishing returns.
There is a tendency to give consumers yet another "free Legal Insurance"
Read more about these responses
Industry Strategic Options
Read the summary below or go straight
to the details
From Supply-side to Demand-side thinking.
From Stand-alone offerings to Integrated Life Event
From Fixed Immediate Needs to Fluid Whole Life Dreams
From Standard Offerings to Mass Personalisation and
From Make and Sell to Sense and Respond.
From Unidirectional Information to Interactive Product
Development & Manufacture.
Read more about New
Read more about New
built on dialogue and knowledge bases.
Customer Acquisition and Retention
based on understanding and meeting individual needs, aspirations, values
and beliefs, together with added value services.
Read more about
Read more about
McGovern, Gerry, New Thinking, a free weekly
email contributing to a philosophy for The Digital Age, NUA. Send an email
to: New Thinking Request
with the word subscribe in the body of the message.
What I like about New Thinking is that it relates the use of the Internet
and other interactive mediums to the existing use of the various mediums.
Sure, the Internet etc. provides new possibilities and may even create new
business models, but New Thinking reminds us not to neglect the basic marketing
and communications principles as well as human behaviour.
Each email covers just one topic and is typically half a page.
Taylor, Bernard, 1998, The Darwinian
Shakeout in Financial Services - an Interim Report in International Journal
of Strategic Management (Long Range Planning), Vol. 31, Issue 1, February
1997 , Elsevier Sciences, Exeter, England.
See the full list of resources for this
web site for other related resources.
and Cultural Factors] [Technological Advances]
[Political, Legal and Regulatory Factors]
[Financial Services Industry Response]
[One to One Marketing]
[SIM Executive Summary]
[Key Information & Resources]
[List of Support Topics]
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