65% of insurance bosses see new market entrants as a threat to growth
Insurance is one of the top three most disrupted sectors and only the entertainment and media sector is facing greater disruption, accounting firm PwC said in its annual global survey of chief executives.
Some 65% of insurance chief executives see new market entrants as a threat to growth, the survey found.
PwC said insurance chief executives are “significantly” more concerned about the threat posed by new market entrants than those in banking or asset management.
The survey found that 69% of insurance chief executives are concerned about the speed of technological change in their industry and 64% are concerned about the shift in consumer spending and behaviour.
PwC UK insurance leader Jonathan Howe said: “The customer-led shake-up experienced within the entertainment and media sector gives insurance chief executives a good idea of what lies ahead for them.
“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.
“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.”
Technology is the trend that insurance chief executives see as most likely to transform stakeholder expectations in the next five years, the survey said.
As a result, more than 70% of insurance bosses are making significant changes to the way they use technology to assess and meet stakeholder changes.
Furthermore, 79% see cyber risk as a barrier to growth and 70% see limited availability of key skills as a threat to growth.
Howe said: “In the face of so much change, insurers must ask themselves how they begin to respond and how they change threats into opportunities.
“With such rapid technological change, insurers have the choice to determine whether they are part of the disruption or one of the disrupted.”