Life insurance companies continue to be sold - why and what does it mean?

The consolidation of life insurance offices has been a theme over the past few years, and from a corporate viewpoint the reasons are clear; reduced competition, a larger book of business which spreads risk and consolidation of head office functions that further improve return on investment - which can then be returned as lower premiums, or increased profits for shareholders, often a combination of both.

However, there is a dark underside to all this, which is that we also see a consolidation of underwriting philosophy, which means that we generally see a reduction in the level of risk these larger players are then happy to accept. As they move to more streamlined and automated underwriting processes, to further drive down costs, they lose the ability to see the individual and everyone becomes a statistic. Meaning that a smaller and smaller group of people can get the cover they need, albeit at record low cost, and a growing number can get no cover at all who previously could.