Olivier Kramer, the Managing Partner at Gatsby & White, says the EU’s Insurance Distribution Directive (IDD) has redefined the industry roles of insurers and brokers. While insurers are focusing on the manufacturing and the servicing of insurance contracts, brokers are specializing in advice, distribution, product or solution suitability, identification of clients’ needs, compliance, independence and transparency.

What are the current trends in the distribution of life insurance solutions?
Private Placement Life insurance (PPLI) can help wealthy individuals with tax-efficient investment and planning strategies. In the past insurers’ internal sales forces have been responsible for sales and distribution and, to some extent, policy maintenance. However, the introduction of IDD created a requirement for better pre-contractual information, freedom of choice, increased transparency and support for the policyholder during the entire life cycle of the contract. IDD requires clearer identification of risks associated with insurance, and its distribution and in turn, has redefined interactions with end clients. This had dual effects: the emergence of a new breed of specialized insurance brokers, meanwhile, moving away from internal sales, insurance companies have refocused on their core business: manufacturing and servicing insurance contracts.

How has Gatsby & White positioned itself to benefit from these developing trends?
Thanks to our multi-market expertise and the long experience of our Partners in insurance distribution and related advice, we anticipated that IDD would create a  disruption. Consequently, Gatsby & White has been positioning itself for IDD’s introduction for the past ten years. We developed our internal processes to ensure utmost compliance with its requirements for fully independent insurance distribution. We also invested in the recruitment of highly qualified staff as well as in the quality of service and support systems, ultimately aiming at bettering the client’s experience.  The company is now transitioning to a more digitized environment by improving system integration with its insurance and financial partners while pursuing both its organic and strategic growth.

What impact has IDD had on the way PPLI clients interact with insurers?
The roles of all parties have been redefined and clarified by IDD. A new player, the insurance broker, like Gatsby & White, now supplements the traditional, tripartite relationship of client, financial adviser and insurer. As a broker we are the client’s “spokesperson” with the insurer: acting as independent advisers and facilitating the relationship among the parties. We advise clients on the range of available solutions based on an assessment of their specific needs and personal situations. This includes investment profiling, insurance suitability and compliance with increasing emphasis on due diligence and “Know Your Customer.”  Access to independent information and greater transparency through their broker provides clients with a greater freedom of choice ultimately leading to more informed decisions.