However, for general insurers confidence fell despite a solid increase in volumes and a further rise in activity expected across the first three months of this year.
Optimism amongst the insurance broking community dipped for the first time in five years, with little change expected.
Life insurers’ positivity was not mirrored across the rest of the financial services community, where collective sentiment deteriorated in the quarter to December, rounding off two years of flat or falling optimism.
Life and general insurers see the need for a broad range of actions to ensure that the UK remains a leading FinTech and innovation centre. Among the chiefs concerns are the need to attract talent, accelerate the digitalisation of services and ensure sufficient investment in technology infrastructure.
Firms also see an important role for regulators and government collaboration. Accessing talent was a particular concern amongst general insurers.
Commenting, Jim Bichard, UK insurance leader at PwC, said: “Optimism amongst life insurers reached a 2017 peak in Q4 and also outstripped the rest of the financial services community, reflecting the confidence of the sector.
“Most life insurers have now emerged from beneath the shadow of pension annuity reforms. They now feel they have got some clarity and are moving forward with the changes. This has paved the way for a change in strategy to focus much more around wealth and asset management.
“Looking at non-life insurance, the impact of business from the wider economy is around cost reduction, leading to sector players reviewing their business footprint, and increasing efforts to ensure greater automation and efficiency. The impact of Brexit has manifested itself as a drop in overseas business for the general insurance community, perhaps unsurprisingly given London’s role as an international speciality hub.
“For insurance brokers, competition is as high as it has been for a while from other FS businesses, or new entrants. These brokers are increasingly at risk of disintermediation with emerging technologies like blockchain. They are having to evolve their business model to focus on advice rather than transactions.
“Focusing on fintech more generally, the biggest hurdle facing the insurance sector is not the availability of fintech or the infrastructure, it’s having the people who understand it. Our clients believe the best way to be more fintech- enabled is to invest in people.”
The full report covering the financial services sector is available here December 2017 Financial Services Survey.pdf
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