Insurance firms are feeling the pressure from below and above, according to new data out today from accounting group PwC, with bosses citing regulators and new competitors entering the market as two of their biggest concerns.
The survey revealed that 94 per cent of insurance chief executives are concerned that over-regulation in the sector could be harmful to their companies’ growth prospects.
Meanwhile at the other end of the market, insurance chiefs are also worried about new entrants to the market - 65 per cent see them as a threat to growth. The report shows that bosses in the sector are “significantly more concerned about the threat posed by new market entrants than their banking and asset management counterparts”.
This is tied to the fact that 69 per cent of insurance chiefs are concerned about the speed of technological change in their industry, while 64 per cent are concerned about the shift in consumer spending and behaviour.
According to the firm’s 19th Annual Global CEO Survey, insurance is one of the top three most disrupted sectors, with only the entertainment and media sector facing potentially greater disruption. PwC’s UK insurance leader, Jonathan Howe, said insurance bosses could learn from the “customer-led shake-up experienced within the entertainment and media sector”.
“Insurers are beginning to realise they have nowhere to hide and new market entrants will take margins – the technological revolution is here and insurers need to work with and learn from the innovative start-up companies already operating in this area,” said Howe.
“Customers are demanding a more interactive experience and continue to focus on cost. Fintech companies operating in the insurance space are knocking at the door and are more than happy to set new competitive benchmarks for customer experience.”