Despite this insurers continue to invest in tech and their people to deliver transformation.
Looking at general insurers, competition both domestically and internationally is on the rise, with increasing pressure from other sectors of financial services and new entrants. To stay ahead, general insurers are continuing to invest in IT to provide new services and reach new markets. As a result, general insurers report rising operating costs in part driven by ongoing regulatory changes, but also a marked increase in headcount and training.
Reading across the broker results, business appears muted. Optimism is down, profitability and volumes are up, but firms can see opportunities to grow, in particular through organic growth activities and investment in IT.
Commenting, Jim Bichard, UK insurance leader at PwC, said: “Under pressure and threatened by growing disintermediation, firms are looking at technology and new talent to help show and add value to their offerings. This drive to invest and evolve their businesses is leading to increasing operating costs, a trend we’ve seen decrease over the past six months.
“Looking ahead, tech, talent and the skills appear as strong themes this quarter and nicely support the findings of our recent CEO survey. In fact, more insurance CEOs are concerned about the pace of technological change than any of other industry. Therefore it is reassuring to see insurers maintain focus on their people and technology, looking beyond the uncertainty of today to grow their businesses.
“Even with the safety net of a transitional period being established, Brexit draws ever closer. Insurers and their customers demand the certainty needed to carry on doing their business atr home and further afield.”
Financial Services Survey March 2018
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