The insurance market has changed immensely in the UK over the past several years.

The proliferation in products, the changes in sales tactics, the de-regulation of the financial sector and the increasing litigation culture in the UK have all made a difference.

Companies no longer specialize. They offer a wide portfolio of Products, and not just insurance: loans including retail credit deals, mortgages, credit cards. Not just traditional financial service companies either – banks, building societies, credit companies, even supermarkets and department stores now offer these services.

The traditional products – life, car, travel and home insurance – have been supplemented with specialist variations. Travel insurance is no longer about the package holiday. Mum and dad go hiking, students go white water rafting and teenagers and children need insurance for the school trip.

Life insurance policies are now supplemented by critical illness, accident and health cover. Health cover can consist of prevention, treatment, loss of earnings or medical expenses.

Mortgage insurance is joined by loan repayment and redundancy insurance. And credit card and identity theft insurance have recently entered the market.

Even car insurance has got in on the act offering specialist deals to car hobbyists (e.g. the British Mini club).

Blended insurance products are also being offered. House and car insurance can be covered in a single policy allowing younger drivers to be covered more cheaply than by traditional offerings. Car insurance now includes breakdown cover and may be tied to the individual not the car. Legal advice may also be included.

And, as mentioned above, litigation culture has come to the UK forcing organizations to take out insurance where previously they would not have considered being sued. Churches and charities have been particularly affected. The way insurance is sold has changed as well. While direct marketing over the telephone and via the Internet have had an impact on the marketplace, the dire predictions of the death of the middle man have not been realized. Indeed, insurance brokers are growing in strength.

This paradox is readily explained. Insurance companies have cut costs by concentrating on the direct sales market. Call centre and dotcom economies have allowed them to drive down costs, lower prices, increase sales and raise profit margins.

But, at the same time, brokers have stepped into the gap, customizing offerings in line with customer’s requirements and providing local presence in addition to modern selling channels.

The next steps are likely to be in the direction of mobilizing the work forces to reduce the physical footprint of organizations and decrease overheads again.

While the brokerages will retain the storefronts as a door to local markets, particularly for middle aged and older individuals who value the human touch (and who are becoming an increasingly large proportion of the UK population), a lot of background operations will be moved out of the office and into people’s houses.

Call centres will move in the same direction. The move to foreign climes will probably be reversed for cultural reasons (people like to talk to their own) and security ones (recent incidents of identity theft). Instead, cost cuts will be achieved through using home workers as direct sales staff.

Indeed, ironically, it may be possible to blend the historical role of door to door salesman with a telesales home working role.

Whatever happens, the customer is benefiting from the changes: From the convenience of one-stop shopping; the price economies, the ever increasing financial flexibility and imagination of insurance offerings and the revolution in communications channels.

Life insurance has been replaced by lifestyle insurance in more ways than one.