Insurance bosses optimistic about Q2 2024 growth

The majority of insurance leaders are optimistic about business growth in the second quarter of 2024.

That was according to KPMG UK, which revealed that its latest survey showed 79% of executives cited confidence about the coming quarter.

The survey, which was published today (18 March 2024), asked leaders in the financial services sector if they were optimistic about their business outlook.

While most insurance executives were confident about growth, optimism grew among those working in asset and wealth management, with 83% casting a confident outlook on Q2 2024.

This increased to 94% for those working in the banking sector.

Figures also show the prospect of a general election later this year was not deterring sector optimism, with over two-thirds of leaders feeling positive about this for the sector’s future.

More than 150 UK adults who are director level and above in financial services companies were surveyed.

Karim Haji, global and UK head of financial services at KPMG, said: “The start of the year saw renewed growth for the economy and forward-looking indicators point to further signs of recovery, which may well be the reason for continued optimism among leaders in the sector.

“The prospect of a general election isn’t shaking the financial services sector. In fact, most leaders are surprisingly upbeat about it.”

Pressures

Despite this, the impact of inflation and interest rates on financial services businesses continues to be reflected in cost challenges.

For example, almost of a quarter (23%) plan to reduce headcount and hiring, change or downside their real estate footprints and review staff pay and benefits to make savings in Q2 2024.

And over a third of leaders (37%) plan to make cost savings by reviewing suppliers.

“While financial services leaders are keeping an optimistic outlook, they do so with caution as costs are still a concern and the sector continues to eye up savings in response to economic pressures,” Haji said.

“Regardless of the political environment and while the economy is showing some signs of recovery, the coming months will continue to be challenging.

”Not only does the sector need to remain resilient now, but it also needs to look longer-term and invest in ways to boost productivity through technology, effectively respond to regulatory demands and build sustainable business models. This will all be an essential driver of growth and will lay solid foundations for competitiveness as the economy rebounds.”