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General insurers have seen a large uptick in the value of insurance claims over the past 12 months and expect this to increase further in the year ahead.
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Total operating costs have increased and will continue to do so. Investment in technology continues to be a theme across the sector.
The top three reasons life insurers will be investing in the year ahead are:
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Complying with regulation.
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Replacing legacy systems
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Improving efficiency
For general insurers, the reasons are:
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Improving efficiency, providing new products and reaching new customers
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There has been a significant rise in the threat insurers see from other sectors of financial services, as well as the threat from new market entrants.
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Insurers see the political and regulatory environment as the biggest weakness of the UK’s environment for innovation in financial services. Strengths listed include the flourishing FinTech community, access to talent and capital, and strong customer demand for new products.
Jonathan Howe, UK insurance leader at PwC, commented: “The continued investment in people and technology shows insurers are committed to change in order to better serve their customers and ultimately further cut costs.
“As the focus on modernisation hots up, it is not surprising that insurers are concerned about the availability of staff with digital skills. They should further explore the opportunity to tap in to the exciting and diverse skillsets found in start-up companies – partnering as an alternative to recruiting.
“The rise in the value of insurance claims will cause significant concern for those in the general insurance market and is a contributing factor for the ongoing focus on cutting costs throughout the business to maintain profitability.”
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