Legal & General is to target web-enabled stakeholder pensions at thousands of PowerGen’s small and medium-sized enterprise (SME) customers via the utility’s website.
The strategic alliance between the insurer and the utility will allow both companies to cut operating costs by cross-selling services to businesses and consumers through interlinked websites.
Industry analysts believe this kind of “worksite” will take off in the next few years and change the face of financial services as companies race to deliver traditional products over the Internet.
With stakeholder pensions due to come into force in April 2001, Legal & General plans to market its stakeholder pension product to PowerGen’s 250,000 SME customers through a link to the utility’s website.
The companies will pilot the system over the next few months. Although initially based on stakeholder pensions, it will allow customers and employees to receive information about, and apply for, other financial services online.
PowerGen plans to sell gas, electricity and telephony services to residential customers through a Web-link to Legal & General’s 1,500 estate agency partners.
Legal & General is also planning to offer PowerGen staff access to a worksite marketing scheme that will give them financial services at a discount price.
The deal strengthens Legal & General’s existing worksite marketing service, whose clients include the Computing Services & Software Association.
Mark Edwards, a partner at Andersen Consulting’s financial services practice, said the introduction of stakeholder pensions was driving the growth in worksite marketing.
“The theory behind this is that it is win, win, win,” he said. “You are selling to not one, but thousands of people through an intranet site. The employer gets an improved employee website and it has cheaper overheads for companies selling products.”
But if “self-serving” is really going to take off, IT managers at insurance firms may be forced to upgrade their existing legacy systems to cope with a surge in web demand for services, warned Edwards.