There has been widespread reporting recently about the fact that The Office of Fair Trading is investigating whether the acquisition of Avelo by the Australian firm IRESS “may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom”.
Our view is that the UK Financial Services market should welcome an injection of capital that will hopefully result in development of improved technology to help Financial Advisors and ultimately consumers.
However, this debate does raise the wider question of ensuring competition is encouraged throughout the Financial Services market. Avelo is one example of a financial product comparison portal that only exists with the support of the product providers. In the Protection market there is less than a handful of such portals, and this has undoubtedly led to stagnation. Whilst some product providers are showing support for new ‘portal’ entrants, too many seem happy to maintain the status quo, which is certainly not good either for completion or for innovation.
Coupled with this lack of choice of protection ‘portals’ is the reality that Insurers themselves are not offering real competition in the market. This is a result both of the restrictions of technology systems and the fact that they are conservative by nature.
Total Systems is showing how to successfully support fresh thinking in the Protection market, much needed if we are to truly engage the modern digital customer. However it has been an uphill struggle and it is only because companies like Legal & General, Ageas, PruProtect and Royal London are willing to lead the way that we can deliver a new and better approach for their customers. Hopefully this focus on the need for competition by the OFT will open a wider debate.