February 10, 2004

The presence of low interest rates is sparking an interest in the insurance industry, and banks are looking at ways to stimulate growth in customer revenue. Banks are also looking into creating better service for current insurance policyholders, according to Jim Gahagan, vice president and global industry executive, financial services, PeopleSoft (Pleasanton, Calif.).

"The industry is going through a tremendous amount of change," says Gahagan. "Certain insurance companies are finding unique ways of differentiating themselves and delivering a unique value proposition to its customers. There is a very strong emphasis to high level of service to stakeholders."

An attractive and quickly growing area in the insurance industry is the annuity market, according to Craig Weber, senior analyst, Celent (Boston).

"The annuity market will continue to be hot, particularly in the fixed-annuity stage at this point," says Weber. "As the equity market returns to growth, we might see money headed back to the annuity market."

Other than annuities, which are popular because of guaranteed returns, according to Weber, banks will also continue to provide popular current products to customers.