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UK Worksite Marketing in Financial Services 2004Product Type: Market Research ReportPublished by: Datamonitor Published: October 2004 Product Code: R313-7230 Description IntroductionAnalysis of the worksite market for financial service products in the UK, and advice on future opportunities. The report uses Datamonitor's 2003 and 2004 worksite surveys to show the trends in flexible and voluntary benefit schemes and gives a providers and employers perspective on the worksite channel. Results from the surveys provide key steps to success for worksite companies to follow. Scope Utilizes Datamonitor's 2003 and 2004 surveys of employers and providers to highlight the state of play in the UK worksite market The worksite survey 2004 provides insight on take-up rates, communication methods, e-worksite marketing and the worksite market Provides an insight into the effect of both current pension reforms and UK labor market characteristics on the UK worksite channel Identifies and analyses the key drivers and barriers to the development of worksite marketing of financial service products in the UK Highlights Most of those surveyed for Datamonitor's Worksite Marketing Survey 2004 expected the fastest growth in the worksite market to occur in the next twelve months. This makes it increasingly important for companies to establish the a strong strategy immediately. Datamonitor estimates that the current worksite market for life & pension products accounts for between 4-5% of total life and pension new business sales. This sizes the market at approximately GBP237-296m in 2003. Although e-worksite marketing was seen as being the key future trend within the worksite market, it was expected to act as a complement to the traditional face-face approach rather than an alternative. Reasons to Purchase The report helps you to understand the key factors driving success in partnership marketing and distribution Benefits consultants, IFAs and direct distributors can gain a fresh perspective on the attitudes of employers towards financial services partners Readers can gain better understanding of how competitors are approaching the market, allowing them to gain competitive advantage Table of Contents CHAPTER 1 EXECUTIVE SUMMARYMarket context Changing Face of Pensions UK Labor Market Distribution in the Workplace Providers’ Perspective Barriers to worksite marketing The Future Decoded Steps to success CHAPTER 2 DISTRIBUTION LANDSCAPE PRODUCT SUITE CHAPTER 3 INTRODUCTION What is this report about? Who is the target reader? How to use this report CHAPTER 4 MARKET CONTEXT Key findings Overview of worksite marketing What is worksite marketing? Benefits of worksite marketing Type of packages on offer Standard benefits Flexible benefits Voluntary benefits Life & Pension products: Long-term protection Pension products Other products Employee take-up rates Advice within the workplace Take-up rates Companies’ benefit strategy hinges on employee demand Comparative markets: Worksite marketing on foreign shores CHAPTER 5 UK: THE CHANGING FACE OF PENSIONS Introduction Key findings Stakeholder pensions in 2001 Worksite pensions in 2004 UK regulatory reforms The stakeholder suite of products Why will basic advice be cheaper? Negative reactions to the Sandler Suite CHAPTER 6 UK LABOR MARKET Introduction Key findings UK Employment patterns Industrial variations in size of business Number of employees per site Socio-economic factors and their impact on pension scheme membership CHAPTER 7 DISTRIBUTION IN THE WORKPLACE Introduction Key findings Setting up worksite partnerships How partnerships are established Worksite Partnership options Employee benefits consultants IFAs Self-adminsitration via direct partnering with financial institution Provider opportuntities - proactively encouraging companies to set up financial benefit schemes Product distribution within the worksite Pension products Insurance Loans and savings CHAPTER 8 PROVIDERS’ PERSPECTIVE Introduction Key findings Size of the market Total and new business premiums Industrial worksite variations Growth of the Market The next twelve months The next five years The Worksite Distribution Model Poundsaver? Communication is the key The Electronic workplace Driving profitability Finding profitable business Driving take-up from clients CHAPTER 9 BARRIERS TO WORKSITE MARKETING Introduction Key findings Barrier 2: Limited access to technology Barrier 3: Lack of marketing within the workplace Barrier 4: Multiple employee locations Industrial variations CHAPTER 10 THE FUTURE DECODED Introduction Key findings The Future Decoded Key future drivers Key drivers Key barriers Impact of regulatory changes Depolarization Stakeholder pensions and Sandler products Employers’ reactions to government initiatives The future of flexible benefits Flexible benefits drivers Products in flexible benefits schemes The future of voluntary benefits Voluntary benefits drivers Products in voluntary benefits schemes CHAPTER 11 STEPS TO SUCCESS Introduction Key findings Employer Attitude Maximizing profits Targeting the right industries Communication Adding Value The role of service in worksite marketing CHAPTER 12 APPENDIX Databook Market Context UK Labor Market Distribution in the workplace Providers Perspective Barriers to worksite marketing Steps to success Definitions Research methodology Datamonitor Financial Services Consulting Life & Pensions SPP Team How to contact experts in your industry LIST OF TABLES Table 1: Small employers* current provision of information and advice Table 2: FSA’s estimates of total sales time Table 3: Although the Financial Services sector is the highest paid it is also one of the smallest segments Table 4: Membership of pension schemes is higher among full-time women than men Table 5: Pension membership is highest among full-time women working in managerial and professional positions Table 6: Benefits offered as part of core benefits package Table 7: Benefits offered as part of flexible benefits package Table 8: Benefits offered as part of voluntary benefits package Table 9: Primary reason for not offering flexible or voluntary benefits in the workplace Table 10: Factors that would convince employers to offer financial services through the workplace Table 11: Employers’ estimated take-up rates of flexible or voluntary benefits, by product type Table 12: UK employment by number of employees per business, 2003 Table 13: UK employment by number of employees per business, 2003 (cont) Table 14: Methods for employees to apply for products and benefits Table 15: Methods of setting up worksite partnerships with financial institutions Table 16: Internet access by size of employer Table 17: Methods of selling products to employees Table 18: Average Earnings, Internet Access, number of employees per industry Table 19: Average Earnings, Internet Access, number of employees per industry (cont) Table 20: Average Earnings, Employees per site, number of employees Table 21: Average Earnings, Employees per site, number of employees (cont) Table 22: Survey respondents by industry sector Table 23: Survey respondents by company size LIST OF FIGURES Figure 1: Bundling structure of UK Distribution Landscape 2004 Figure 2: Life insurance is the most commonly offered standard benefit Figure 3: The majority of companies do not offer flexible benefits schemes Figure 4: 70% of companies offering flexibile benefits had more than 1000 employees Figure 5: Private healthcare and dental insurance are the most commonly offered flexible benefits Figure 6: A little over a quarter of companies offer voluntary benefits schemes Figure 7: Larger companies are much more likely to have a voluntary schemes in place Figure 8: Management are more likely to be offered voluntary benefits than standard employees Figure 9: Whilst Individual face-to-face advice is the most effective method of communication it is the most expensive to provide Figure 10: Pensions and life assurance are most likely to be taken up by more than half the workforce Figure 11: Lack of employee demand is primary reason for not offering flexible or voluntary schemes Figure 12: Greater employee demand would encourage employers to offer financial services through the workplace Figure 13: Distribution within the UK labor market is focused around two segments Figure 14: The agricultural and construction industries have the lowest average number of people per physical site Figure 15: Direct negotiation between provider and the client is the most common channel for establishing worksite partnerships Figure 16: SWOT analysis of partnering with benefits consultants Figure 17: SWOT analysis of partnering with IFAs Figure 18: SWOT analysis of self-administrating financial benefits schemes for employees Figure 19: HR departments are most frequently used for signing up to life and pensions products Figure 20: HR departments are the most used channels for general insurance arrangement in the workplace Figure 21: HR department is a popular choice for loans and savings products Figure 22: The majority of those interviewed saw worksite marketing as the cheapest distribution channel, but only by a slim margin Figure 23: Communication and employer attitude were seen as the key success factors in establishing a successful workplace scheme Figure 24: Only 25% of respondents saw E-Worksite marketing as being very important to worksite marketing Figure 25: The number of employees was the most important factor for providers in targeting clients Figure 26: Fees are the most common payment method for providers Figure 27: Face-to-face communication is widely seen as the most effective method of communicating with employees Figure 28: Whilst 56% of small businesses now have access to the internet only 7% have access to an intranet Figure 29: Only 54% of retail businesses had internet access in 2003 Figure 30: Employers are less likely to push benefits at employees than explain them passively Figure 31: The agricultural and construction industries have the lowest average number of people per physical site Figure 32: Public administration and education are the two most heavily unionized segments Figure 33: Respondents saw increased use of E-worksite marketing as being the key future trend within the worksite industry Figure 34: Employers attitudes to worksite schemes are seen as being the major barrier to the development of the worksite market Figure 35: Although the majority of people expected the DWP pilot to have some effect this was only because they felt it “couldn’t do any harm” Figure 36: Although the majority of respondents expected the tax relief to have some positive effect this was generally because they believed they could use it as a minor marketing tool Figure 37: The majority of those surveyed didn’t think the increasing of the stakeholder cap would have any effect on the worksite market Figure 38: The vast majority of companies will not be introducing flexible benefits schemes in the next 12 months Figure 39: Hotels and restaurants & Wholesale and Retail are the two most unattractive segments of the market for E-Worksite providers Figure 40: Financial Services and Utilities are the two most attractive market segments for providers who focus on face-to-face meetings Figure 41: A range of industry sectors was represented in Datamonitor’s extensive B2B survey Figure 42: The size of the companies surveyed ranged in size from small to very large Figure 43: A representative sample of leading figures were interviewed for the 2004 survey |
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