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J u n e 2 0 1 5intelligent solutions for life & pensions

1www.exaxe.com

Exaxe, the specialist solutions provider for the life and

pensions industry, has announced that UK based Police

Mutual Assurance Society has selected Exaxe’s Admin

Plus and Illustrate Plus solutions as its new policy

administration platform. The renewable �ve year

licence agreement marks the fourth licence sale for

Exaxe over the past twelve months and is further

evidence of the growing demand for its software

solutions.

The multi-million pound agreement will allow Police

Mutual, to consolidate multiple lines of business on a

single modern technology. Admin Plus and Illustrate

Plus will enable Police Mutual to improve service levels,

accelerate business innovation and reduce the lead

time for introducing new products. The solutions will

support all aspects of the policy lifecycle from new

business, policy servicing, and right through to claim

processing. Admin Plus will also allow Police Mutual to

tailor products for di�erent a�nity groups and achieve

industry-leading levels of self-su�ciency.

Illustrate Plus will allow Police Mutual to provide

web-enabled quotations and illustrations direct to

consumers on a self-service basis. The Product

Development Application, within Illustrate Plus, will

Police Mutual Assurance Society selects Exaxe’s Admin Plus and Illustrate Plus solutions as its policy administration platform

give Police Mutual the self-su�ciency that its

competitors aspire to achieve.

David Loughenbury, CIO of Police Mutual commented,

“Police Mutual continues to invest in new solutions to

better bene�t our members. We chose Exaxe for the

quality of its technology, together with its business

expertise. We do not have any shareholders, and this

allows us to focus purely on what our members want,

such as using a ‘digital by default’ frame of mind when

servicing their needs. By implementing Admin Plus and

Illustrate Plus, we can provide a higher quality service to

our members through tailored products and quicker

response times. We look forward to working with the

Exaxe team”.

Philip Naughton, Exaxe’s Executive Business Develop-

ment Director added, “We are delighted to sign this deal

with a customer focused business like Police Mutual

Assurance Society. Admin Plus and Illustrate Plus will

allow Police Mutual to launch its new products quickly

and e�ciently giving it a distinct advantage over its

competitors. The new modern platform will also position

Police Mutual to meet the challenges of a rapidly

changing market, both in terms of �nancial services and

the means of delivery.”

IN THIS ISSUE

Police Mutual Assurance Society selects Exaxe’s solutions as its policy administration platform

2015 UK Budget expands pension freedom strategy

Technological transformation in the protection world

AXA Life Invest goes live with second Exaxe software solution Channel Plus

Exaxe appoints Head of Operations

Whose data is it anyway?

What lies ahead – The UK life and pensions landscape in 2020

2015 UK Budget expands pension freedom strategy // John Keegan – Head of Proposition Delivery – Exaxe

It’s di�cult to understand what the current

government’s policy to deal with the ageing UK

population is supposed to be. For most of the nineties

and the noughties, international bodies were warning

all governments that the increasing longevity of the

population in the developed world was going to create

a huge problem for OECD countries by the middle of

the 21st century. Governments were warned that their

economies would not be able to withstand the

pressure of coping with an ever-increasing proportion

of their populations being retirees. In response, all

sides of the political spectrum in the UK recognised the

severity of the issue and began to focus on how to

manage the problem.

Increasing the state retirement age and re-organising

the basic state pension were obvious changes and

have been pushed through. However, these were only

partial solutions to the problem and there was general

agreement amongst all parties that, if a crisis was to be

avoided, then the onus must be put on workers

themselves to provide more for their own retirement.

Hence the introduction of auto-enrolment, defaulting

employees into pension schemes so that the vast

majority of the workers in the country would have

private savings to supplement their state pension. The

primary aims of introducing fairness, simplicity and

above all, personal responsibility were covered by the

new reforms.

Since then, the Coalition has embarked on a series of

changes in the long-term savings and investments area

which seem to contradict the previous strategy. Faced

with a lot of complaints about the poor value of

annuities, the Coalition decided against reforming the

market and instead opted to abolish the need for

people to purchase them at all, thereby removing the

very ‘insurance against longevity’ that was needed to

ensure the strain put on public �nances by an ageing

population would not become over-whelming. Thus,

driven by a populist approach predicated on the

principle that people know best how to manage their

own money, the at-retirement market was opened up

to allow people full access to their pension savings.

They ignored the commensurate risk that retirees

would squander those savings in the early years of

their retirement and revert to dependence upon the

state in their later years, the very years when earning

would become di�cult if not impossible for health

reasons.

That was the big surprise in the 2014 budget, primed

with its e�ect due to come into force just six weeks

before the next general election. Now in 2015, the

government has carried out another couple of

manoeuvres which appear to operate directly against

the overall policy of ensuring that people take more

responsibility for providing for their own old-age.

The �rst move is to allow existing annuitants to trade in

their annuities for a lump sum to a third party,

essentially creating a market of second-hand annuities.

The need to see how exactly this market emerges has

restricted comment from the media and industry on

the approach but it is certain that there is a big risk for

annuitants who decide to realise their current income

as a lump sum. Given increasing longevity the decision

whether to surrender one’s annuity for a cash lump

sum is obviously a di�cult one and one which most

individuals are not particularly well equipped to make.

Obviously, the would-be purchaser will not buy the

annuity without a reasonable estimation that the

annuitant will live for long enough for the money

outlaid to be recouped and to make a su�cient margin

on it. As such, that means that from the original pot, a

slice has been taken by the original life provider that

manufactured the product as well as possibly an

adviser who advised on the deal. Now that identical

pot will naturally have a further slice taken from it by

the second hand annuity purchaser and possibly a slice

will also go to an adviser, if one was used to e�ect the

arrangement. It’s hard to see how the annuitant can

ultimately be the winner in all of this, except in those

rare tragic cases where the need for a lump sum is so

overwhelming that it trumps all other needs. However

the lure of instant cash lump sums may trump

long-sightedness, especially with the general

anti-annuity prejudice that is prevalent throughout the

�nancial press.

The other big move in this year’s budget, that was a bit

lost behind the headline-grabbing abolition of tax on

savings interest, was the lowering of the Life Time

Allowance (LTA) for pensions; the LTA being the total

amount that one is allowed accumulate across one’s

lifetime for pension purposes. Of course, some limit is

needed to prevent pensions being misused by the

ultra-high net worth individuals. But a limit of £1million

is far too low to allow people to provide themselves

with a decent income in retirement, given that the

average pensioner can expect to live for 20 years after

�nishing work.

The motivation behind this was hard to fathom. When

LTA’s were originally introduced in 2006, the limit was

£1.5 million and we were assured that it would rise over

the next 5 years to a limit of £2 million. The idea was to

encourage saving by allowing people to amass

signi�cant savings for their old age, without allowing

the system to be abused by the super-rich. As such, it

was reasonable for people to defer current pleasures in

the knowledge that they were building a comfortable

future for themselves.

Unfortunately, when people took the government at

their word, the result was a savings pile that has

appeared too lucrative for the politicians to resist

tapping into when they are struggling to balance their

budget. As a result, the lowering of the Life Time

Allowance has become a regular budget event. It is a

speci�cally bad move for those saving in De�ned

Contribution schemes as an LTA of £1million would

penalise anyone trying to save for a pension of over

£25,000 per annum – a relatively modest sum.

Continued on page 3...

“We chose Exaxe for the quality of its technology, together with its business expertise.”

David Loughenbury, CIO, Police Mutual

Now in 2015, the government has carried out another couple of manoeuvres which appear to operate directly against the overall policy of ensuring that

people take more responsibility for providing for their own old-age.

intelligent solutions for life & pensions

2

This article was originally commissioned and

published in the February 2015 edition of the

Investment Life & Pensions Moneyfacts

publication.

Tom Murray explores the impact of emerging

technologies on the protection market.

I have been working my way through the TV series

‘House’ over the last few months, courtesy of Net�ix,

and I have been struck by the similarity between the

di�culties faced by the diagnostic team in the

programme and those faced by underwriting teams in

the life assurance industry.

“Everybody lies” is one of the catch-phrases of Hugh

Laurie playing the misanthropic Dr. House; as a head

of the department of Diagnostic Medicine in the

series, his primary di�culty in getting to the true

diagnosis of the patient’s condition is the inability to

get the patient to tell the truth. In order to get the key

facts to make the diagnosis, one of his key rules is to

meet or talk to the patient as rarely as possible, as the

patient’s lies are liable to drive the diagnostic process

down the wrong track. Instead, his team breaks into

the patient’s apartment or workplace, or hacks

computer records to �nd out the patient’s lifestyle and

family medical history, which they need to work out

what is wrong with the patient.

The exact same issue is one of the key di�culties

faced in the protection world. Getting disclosure from

the applicant for a protection policy, in order to

underwrite it correctly, has always been problematic.

The truth is out there, but it can be hard to get it from

applicants at proposal stage.

I don’t mean by this that fraud is rampant among

customers of protection products. Far from it! Many

of those who fail to disclose matters material to an

assessment of their health believe themselves to be

completely honest; it’s just that they either don’t know

enough accurate family medical history, or else they

are essentially blocking bad news from their own

minds. Overlooking or oversimplifying of medical

conditions is an inherent human trait to avoid

depressing news and focus only on the positive. Thus,

frequently unbeknownst to themselves, the customer

gives an overly positive view of their health and that

of their ancestors.

This situation has got somewhat worse over the last

30 years. Increasing labour force mobility means that

more people are migrating from country to country,

and therefore have a great deal less knowledge about

their extended family than heretofore.

As a result, life companies have had to price their

products against the fact that full disclosures are not

always made and the incomplete nature of the

disclosure is not always discovered in time to prevent

a pay-out. Curiously enough, incomplete disclosure is

always on the negative side - practically nobody fails

to disclose positive news that will reduce the cost of

their insurance. Although medical examinations are

routinely carried out, they don’t necessarily give the

complete picture as many medical issues rely on the

symptoms and facts as described by the customer.

The only safe approach for life companies is to build a

margin of safety into the rates, an ‘optimism factor’ if

you like, which ultimately increases the cost that the

customer has to pay.

Advances in DNA Science

In a better world, we would have accurate medical

information for underwriting departments to base

their assessments upon. This would be fairer to both

life companies and their clients. And this is where the

huge advances in science, and in particular in

technology, is set to transform the whole underwrit-

ing area.

Incredible leaps forward have been made in the

science of DNA over recent decades. Access to this

information would dramatically improve the ability of

underwriters to individually underwrite to a new,

hitherto unforeseen, level. Genetic disorders are a

signi�cant factor in assessing the likelihood of an

individual acquiring a life-expectancy altering

condition later in life. Currently the industry is

primarily reliant on family histories answered by the

client, but access to DNA testing would signi�cantly

improve the life company’s ‘hard’ knowledge of the

customer without having to rely on the customer

themselves. The trouble is that DNA testing has, up to

recently, been a highly specialised and expensive

process.

Advances in technology are making it far easier to test

for these disorders and it won’t be long before the

majority of tests can be carried out on simple

machines in doctor’s surgeries and clinics, rather than

in high-tech specialist labs. This will mean that it will

be far easier to get a full and accurate report on the

likelihood of genetic diseases manifesting themselves

from a source that can’t lie – the customer’s own body.

As the cost of these tests is reduced by technology, it

will become cost e�cient to carry them out on all

applicants, rather than just on those who are applying

for extremely large insurance amounts.

This increased knowledge will make it easier to re�ne

the pool and therefore to provide cheaper underwrit-

ing to the healthy clients, and to load those who are

genetically pre-disposed to the type of conditions

that will a�ect their mortality. We can expect the

ever-increasing pace of DNA research to reveal a lot

more as time goes on, and technology will make this

information available to life companies.

Lifestyle choices

Another key factor in underwriting individuals is their

lifestyle choices. Given the increasing obesity issues

being experienced by most developed countries, the

underwriter is likely to need a good deal of speci�c

information regarding the lifestyle of the applicant.

Information gathered on this subject is either via a

questionnaire or through questioning by the doctor

Technological transformation in the protection world // Tom Murray – Head of Product Strategy – Exaxe

during a medical examination, and therefore, the

accuracy of the information is completely dependent

upon the accuracy of the descriptions given by the

individual. The trouble here, of course, is that we all

tend to fool ourselves about how much we eat, how

much exercise we take, how much sleep we get etc.

And here again technology can provide the answer.

The advent of wearable technology at an a�ordable

level means that it is possible to gather and monitor

information about the prospective customer’s activity

levels, including their sleeping patterns, pupil dilation,

blood-pressure, and heart rate during their day to day

activities. This constant monitoring of vital signs will

give the level of accuracy that will allow near-perfect

assessment of the individual’s state of health, which

will bring the life companies’ ability to �ne-tune and

personalise risk pro�les to a level previously

unimagined.

Wearable technologies allow far more accurate

assessments of an individual’s health and, in particular,

their lifestyle. Apps are available that allow people to

record their diet during the day, giving de�nitive

answers to the questions, and probably quite a shock

to many individuals. Remember, an iPhone 5 has a

CPU that is 1,270 times faster than the Apollo 11

guidance computer than landed the spacecraft on the

moon. Technology such as Google Glass (version 2.0 is

now being worked on) will almost certainly increase

the amount of personal information that can be

gathered by apps without requiring signi�cant e�ort

by the person wearing them.

Analyse this!

Of course the volume of data that can now be

gathered will also play a big part in increasing the

accuracy of underwriting if it is possible to analyse it

correctly. This is where recent advances in technology

will also help. The ability to churn through ‘Big Data,’

as it is referred to, has made huge strides. The

increasing power of technology now makes it feasible

to quickly process vast volumes of data, establishing

patterns that could never be discovered by more

manual means.

This makes it possible and cost e�ective to get highly

�nessed views on the e�ects of people’s lifestyles and

genetic disposition on the longevity of the individuals

concerned, and on their likelihood to contract certain

diseases and conditions, a key factor for the

assessment of critical illness policies, for example. In

other consumer markets, use of technology is

providing consumers with highly individualised

experiences, and the ability to rapidly crunch big data

and to get highly detailed information on the

customer is going to become a key factor for life

assurance companies as, they try to provide the same

level of personalised customer experience in their

market.

Safety �rst

There is one area that could cause this to become a

problem, however. The perennial issue for life

companies is the amount of highly-personalised data

they hold. Given the previously discussed approach of

using wearable technology to get even more

information about the customer, you can see why

there would be fears that the information would be

leaked. After all, some of this information the

customer was even hiding from him or herself, and

certainly he or she would want assurance that the

information will not become widely available.

Therefore a key concern is the ability of companies to

keep this volume of highly personalised data secure.

To get people to give this kind of information, it is

necessary to be able to assure them that the data is

safe and will not be leaked or misused. Here

technological advances in data protection will make it

easier, as huge amounts of money are currently being

ploughed into the area of data security. The fact that

it is a key issue for governments as well is reassuring

as this means that funds will constantly be made

available for research in this area.

Despite the media trumpeting of occasional security

failures, trust is nevertheless growing rapidly in data

security. Just a decade ago, most people were

extremely wary about using their own credit card

details online, and yet now a huge proportion of the

world uses the internet to shop and are quite

comfortable using their �nancial information online in

order to do so. According to Statista.Com, the

amount of shopping carried out online in the USA for

Christmas 2014 was 45% of the total holiday spend.

This makes it easier to see a future where people will

not be wary of sharing that level of personal medical

information with life companies, giving us a protec-

tion market that is better value and more customis-

able than ever before.

Technology is changing our tomorrow

It is possible for people to be wrong. Even the

incredibly astute and clever Dr House can get it

wrong; “it’s not lupus – it’s never lupus” …until it

actually was lupus in the eighth episode of the fourth

series. However, the availability of such a huge

amount of detailed and personalised data, and the

ability to process it rapidly, means that far more

accurate predictions of future health and longevity are

possible for underwriters, which will usher in a new

era of heightened accuracy and personalisation in the

protection market.

T: +353 (0) 1 2999100 E: info@exaxe.com W: www.exaxe.com : @ExaxeTransform your businessand contact us today!

government �nds it too di�cult to resist tweaking

pension and long term savings regulations to please

the public then perhaps it could be an area reserved

for the Upper House, in any future constitutional

changes.

Given that the House of Lords is generally less partisan

than the House of Commons and is immune from the

pressures that arise from the need to get re-elected,

taking the long-term savings policies out of the remit

of the day-to-day policy making of the government

would give the opportunity for a more far-sighted and

consistent policy to be put in place. This policy could

be cross-party and therefore less vulnerable to the

changing winds that blow across the political arena

when elections are in the o�ng and a policy that

would therefore provide the stability that people need

when it comes to long-term planning.

Without a solution, the contradictions inherent in our

approach will completely undermine our response to

the longevity issue raised by the OECD, and govern-

ments in the mid-century will wonder why we

squandered such an opportunity to provide a

sustainable solution to the good ‘problem’ we have of

people living longer.

intelligent solutions for life & pensions

3www.exaxe.com

Further to the recent announcement that AXA Life

Invest has successfully gone live with Exaxe’s Illustrate

Plus solution, Exaxe is delighted to announce that AXA

Life Invest has now successfully gone live with

Channel Plus, Exaxe’s agency managed, commissions

calculation and payment solution.

Channel Plus is a web-based, automated solution that

supports agency and compensation management for

the life, pensions and wealth management sectors

across all distribution channels. The implementation

of Channel Plus will enable AXA Life Invest to unify its

entire agency and �nancial advisers’ administration

services onto a single platform, yielding operational

e�ciencies and providing an improved service to all

its distributors.

Philip Naughton, Executive Director Business

Development at Exaxe, commented “As a worldwide

leader in innovative guaranteed unit linked products,

AXA Life Invest needed a best of breed approach. Today, it has been able to leverage Exaxe’s capability

and expertise into the core of its systems, and

therefore keep it at the forefront of the market”.

Tom Lane, Head of IT at AXA Life Invest, commented

“AXA Life Invest experienced some challenges with

respect to the management of commissions and fees

paid to its partners and approached Exaxe to provide

an enterprise solution for the management of fees

and commission going forward. In a few short months

our relationship with Exaxe has developed and we are

pleased to have taken this next step with them.”

“Exaxe is delighted that both Channel Plus and

Illustrate Plus software solutions have gone live with

AXA Life Invest. Our solutions allow our customers to

respond to a dynamic market place with the speed

and e�ciency necessary to become market leaders.”

Philip Naughton continued.

“We are delighted to have signed this second contract

with AXA Life Invest. It highlights our long term vision

we share and is representative of the strong

relationship we have built.”

AXA Life Invest goes live with second Exaxe software solution Channel Plus // Sharon McGuire – Marketing Manager – Exaxe

Continued from page 1...

Some of these changes are arguably positive moves

for a subset of retirees. But the cumulative e�ect of so

many changes is undeniably bad. It has meant that

the pension policy area has been one of the most

unstable policy areas over the lifetime of this

government and this instability is anathema to good

long-term �nancial planning.

Whilst the government was formed with a policy of

‘nudging’ to encourage people to do the right thing,

the nudges are now positively contradictory. On the

one-hand, auto-enrolment is pushing people into the

idea of saving and making them consider the need to

provide for themselves in their old age. On the other

hand, the constant trumpeting of the new ‘freedoms’

to take your money as a lump sum at retirement is

nudging people towards rewarding themselves with

big spending at the end of their working career and

stopping them from thinking about the need to

husband their resources over a much longer period.

The result is becoming chaotic. The public are being

told that they are being ripped o� by the �nancial

services sector by government, regulators and the

�nancial press. Without planning it, this is

encouraging a more consumerist outlook on �nances

than was hitherto imagined. For all the failings of the

annuity providers, they did provide the security

against longevity that is so treasured by the relatively

silent group of consumers who have outlived the

average lifetime of their peers.

Even �nancial advisers are �nding it di�cult to decide

what to advise people to do when the landscape

keeps changing so dramatically; today’s good advice

is rapidly becoming tomorrow’s poor advice with the

attendant risk of being perceived as having coerced

people into doing the wrong thing with their money.

Every move by the government to ‘free’ people from

the chains of �nancial products that pay out for the

duration of their lifespan directly undermines the

goals of making them take responsibility for their own

future by auto-enrolling them into �nancial savings

products.

We have ended up with a contradictory mess; a

pantomime in which the life and pension providers

are being cast as the bad guys whom the pensioner

needs to be protected from. The end result of this can

only be to encourage more and more people to realise

their savings as a lump sum, despite the tax penalties

in doing so. As a result, a lot more people will have run

“In a few short months our relationship with Exaxe has developed and we are pleased to have taken this next step with them.”

Tom Lane, Head of IT, AXA Life Invest

2015 UK Budget expands pension freedom strategy // John Keegan – Head of Proposition Delivery – Exaxe

through their savings at quite an early stage in their

retirement; this e�ect will be compounded by the fact

that survey after survey shows that the average

person consistently and substantially underestimates

their own individual longevity.

If the government keeps tweaking the rules and

regulations around taxation, savings and investments

then it supports an idea of short-term thinking when

it comes to �nances. This is the very last thing we

should be giving the increasing lifespan of the

population and the shrinking workforce, which will be

left trying to support them. Perhaps this is just a

temporary move given that the last two budgets were

focused on the election and the nudging of people to

save across their working life and to use those savings

to provide for themselves throughout their retirement

will resume. Unfortunately, even if that is the case, it

would mean that a new raft of rules and regulations

are planned for early in the new government’s term

which would destabilise the ability to plan even

further.

What is needed is a return to a more bi-partisan

approach to pensions and long-term savings and to

take the area completely out of the political arena,

which by is nature is ‘short-termist’. If the

Exaxe appoints Ian Dornan as Head of Operations // Sharon McGuire – Marketing Manager – Exaxe

Exaxe is delighted to announce the appointment of

Ian Dornan as its new head of operations. The move

coincides with the company’s recent announcements

of new long-term contracts signed with Police Mutual

and AXA Life Invest. Ian has been brought on board to

continue driving this growth by further developing

the company’s software development and client

delivery capabilities.

Norman Carroll, chief executive o�cer at Exaxe says:

“Ian joins us with over 18 years’ experience in a variety

of IT operational management roles, 14 of those years

speci�cally within the �nancial services sector with

extensive experience in software development,

hardware and communications.”

“Ian joined Exaxe in January 2015 with his main

objectives to assist the Board with general business

operations and to assume responsibility for internal

product development, client implementation and

post implementation support as the business

continues to grow and expand.”

Norman Carroll continues:

“Our appointment of Ian coincides nicely with our

recent client wins. We are particularly delighted with

this growth in sales and the opportunity to create new

jobs in the current economic climate. It proves that

there is always an appetite for innovative business

solutions especially where they have a proven track

record of being cost e�ective and delivering

signi�cant business e�ciencies. We are also currently

hiring business analysts, .Net developers and software

test engineers.”

Ian Dornan, Head of Operations at Exaxe, commented:

“I am happy to have joined Exaxe at such an exciting

time for the company. It has given me a great

opportunity to hit the ground running. I look forward

to building relationships with Exaxe’s new and existing

clients and to working with the Exaxe team.” Ian Dornan, Head of Operations at Exaxe.

intelligent solutions for life & pensions

by the one who merely stores it.

Perhaps the problem stems from the sidelining of data

during the system purchase process. The purchasing

decision always seems to focus on the business

processes of selling or administering the policies

involved and never about the need to have full,

unrestricted access to all the data about one’s own

customers. And yet, without this freedom of access,

full analysis of the information is almost impossible.

No matter how �exible the interface appears to be,

the fact that the database information, and how it is

stored, is kept a secret by many systems providers

inhibits the freedom of thought and action that is the

key driver of discovery for those who are tasked with

assessing trends of past and current consumption and

who need to predict the future.

Big data is not just a current fad. It is the future of

retailing and predicting future needs and all industries

require the ability to utilise the data they have to

ensure they stay competitive in the rapidly changing

markets in which they are operating. Life and pension

companies are no exception to this rule.

Future purchases of information technology solutions

should weigh very heavily on the ability to access the

company’s own data. It does not belong to the

solution provider so the fact that so many of them

retain control of access to this information is

completely unacceptable and is likely to hobble the

life company performance in the market. To be able

to service your customers properly, you should

purchase from technology providers who allow full

access to the customer data and the rules under which

it is held. It’s your data; make sure that no one else is

blocking your access to it.

There is a lot of talk about the e�ect of big data on

the world of product retailing and how it is going to

transform the whole sector. Mass retailers, such as

supermarkets, are to the forefront of this charge

expending massive amounts of time and money to

analyse the data of their customers; tracking their

purchases via loyalty schemes in an e�ort to get and

retain customers and to make them spend more. Even

smaller businesses are working hard to understand

and track the spending habits of their customers in

order to �nesse their o�ering to them.

The same e�ort is required in the �nancial services

sector. Unlike many businesses, the nature of the life

and pensions industry means that we are in posses-

sion of a huge amount of data about our customers;

perhaps not as much as the big supermarkets but a

substantial amount nonetheless. This gives us the

opportunity to mine that data to understand our

customers better.

The nature of the consumer market for �nancial

products is changing swiftly; increasing longevity is

leading to huge changes in the pensions sector, but it

is also dramatically altering the needs of consumers in

the life sector. Protection, critical illness, long-term

care, equity release; these are all areas that are seeing

signi�cant transformation as the nature of people’s

working and retirement lives change. With the needs

of the public altering so rapidly, it is vital for the

industry to respond just as rapidly if it is to be in a

position to ful�l those needs.

As the supermarkets and the online industries have

shown, monitoring the movements in the buying

habits of their consumer base is key to understanding

the needs of their customers and to predicting what

those needs will be in the future. In the past,

customer-driven product development has not been

the area where the life and pensions sector has

particularly sparkled, but it is certainly where it needs

to be focusing in the future if it is not to lose market

share to new entrants with a more customer-focused

ethos. Trying to remain relevant to the customer in a

market that is being opened up by deregulation is

di�cult enough, not to mention being in a market

where the growth in lifespan is completely changing

the requirements of the end-consumer.

It is, therefore, vital to be in a position to access all of

your data and to mine and manipulate it in many ways

to try to derive information, patterns and theories

from it. A key part of being in a position to do so is

having access to the data itself. Yet here we can

frequently come up against a major problem. For

many life and pension companies, the process of

accessing their own information is through

management information and business information

provided by their systems supplier, which frequently

have an extremely limited interface.

Some technology providers can feel that the

underlying data structure is part of their IP, and are

reluctant to allow the purchasing life and pension

companies to have a full understanding of it, for fear

that they may replicate the system by building their

own version. Some even retain control by

providing a black box solution where there is no

access to anything other than pre-de�ned GUIs and

Interfaces. This is very limiting for the life and pension

company who purchases the system, as it e�ectively

means that their own data on their customers is being

fed out to them in a manner de�ned by the solution

provider. This is truly a case of the cart leading the

horse, as the owner of the data is being constrained

Whose data is it anyway? // Tom Murray – Head of Product Strategy – Exaxe

www.exaxe.com

Future purchases of information technology solutions should weigh very heavily on the ability to access the company’s own data.

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What lies ahead – The UK life and pensions landscape in 2020 // Norman Carroll – Chief Executive Officer – Exaxe

While I don’t claim to have 20/20 vision, I do have a

view of what the UK’s life and pensions landscape will

be like in 2020, and it is one that will be hugely

di�erent from the one we see today.

The changes introduced in recent years have

transformed the game completely. They will take some

time to bed in but their e�ects will be dramatic,

particularly the e�ects of the Retail Distribution

Review, the reforms in the at-retirement space and the

introduction of auto-enrolment. For instance,

auto-enrolment will introduce millions of people to the

use of �nancial products for saving and will thereby

provide great opportunities for cross-selling of other

�nancial products.

We are living in a highly brand conscious age and this

expanded consumer market will be looking for the

type of protection that can only be provided by big

brands. Meanwhile, the deregulation of pensions will

lead to the demand for niche products for the more

�nancially savvy investor. In response, I expect new

entrants will appear from other markets; big brands

that have the trust and engagement to market

e�ectively to brand conscious consumers, and niche

players that will seek to capitalise on the sophisticated

investor’s new freedoms for at-retirement investment. I

predict many joint-ventures between these new

entrants and existing market players, to provide the

product knowledge and management needed for

white-labelling by the brand leaders, and also to

provide the day to day product administration needed

by the niche entrants.

I also foresee that consumers will expect the kind of

multi-platform service that is becoming prevalent

today in so many other industries. An ability to allow

consumers to manage their own investments and carry

out transactions from smartphones and tablets will be

a sine qua non of life and pension services in the next

decade and existing providers are ideally placed to

provide these interfaces to the customer, enabling

the consumers to see their complete �nancial portfolio

– income, investments and protection – in one

place.

Holistic views will become more important as

customers demand individual views of their own

�nancial situation, as they seek to plan for their

retirement, long-term care and estate planning needs.

This will require a level of individual underwriting that

life and pension providers can provide using the

smarter technologies that are emerging, including

wearable technologies. The ability to underwrite at an

individual level due to advances in the science of DNA

will come to the fore in a world where medical science

is increasing the lifespan of the population at a rate

that would have been seen as unbelievable just two

decades ago.

The life and pensions organisation looking to thrive in

the customer-centric market of 2020 needs to increase

its use of technology to provide individualised product

matching to individual customer needs. Life and

pension companies have been through a lot of change

over the past 5 years, and this rate of change is only

going to accelerate. It is an exciting time for the

industry and for all of us involved in it.

Life and pension companies have been through a lot of change over the past 5 years, and this rate of change is only going to accelerate.