It is not every day that a business can lay claim to finding a market niche in a mature, commoditized industry. But that is essentially what UBS International Life, launched this spring, has done.
By focusing its offering on unit-linked life insurance and on UBS’s wealth management client base in Europe, the unit is significantly exceeding expectations. The business is proving to be an effective tool that increases UBS’s share-of-wallet with existing clients, and helps to attract net new money.
A key reason why the business is experiencing strong demand is because its products and services clearly differentiate themselves from that of standard insurance firms. UBS International Life is not in the business of generating volumes per se. Its strategy is to take advantage of a relatively unexplored market segment where premiums are perceptibly higher than the industry average. Products clearly emphasize individualized solutions for high net worth individuals, providing a flexible vehicle suitable for any long-term investment, retirement or inheritance planning strategy.
In core European markets, clients who choose policies worth more than EUR 250,000 can take advantage of UBS’s various discretionary portfolio management strategies and other innovative investment content. For policies above EUR 150,000, clients can choose from among UBS’s discretionary managed fund portfolio strategies or from a number of fund of funds strategies. When bundled with the other components of a private client’s portfolio, including mortgages, loans and trusts, these provide tax-efficient investment solutions and flexible estate planning.
In order to offer life insurance effectively, client advisors working across all the firm’s business areas are able to easily access a straightforward intranet tool that provides comprehensive information. The tool also gives advisors the capability to create offers and applications. Additionally, advisors are supported by a dedicated hotline, newsletters and a small sales support organization. The lean set-up allows UBS International Life to have a competitive cost structure and pricing.
UBS International Life also has a Swiss sister, UBS Life AG, which was launched at the beginning of 2001 and is now established as one of the leading domestic players in the unit-linked insurance market. There the focus is on offering clients a selection of proprietary UBS unit-linked life insurance policies along with traditional third-party products from established providers such as Baloise and Zurich Life.
Put into a broader perspective, UBS’s strategy in life insurance is to complete its wealth management product offering and is by no means a foray into bancassurance. Moreover, as the populations of many western societies continue to age, an increasing number of the core affluent will pay more attention to their individual retirement and inheritance planning needs, giving UBS International Life the opportunity to enjoy growth for the foreseeable future.
Home
