The general insurance landscape of the future will divide neatly into three separate business models, predicts Pricewaterhousecoopers (PWC).

After assessing the state of the market, the global accountants have devised three strategies for general insurers to select. It believes companies will adopt variations on these themes or combine two or more aspects in their organisation:

  • the Invisible Insurer – which will leverage the brands of other financial service providers through alliances and joint ventures
  • the Friendly Bank – provider of integrated bank insurance products to corporate and retail customers
  • the Fixer Bank – provider of tailored coverage to the retail sector using ebusiness platforms to deliver service at competitive cost.

    PWC surveyed more than 210 international property and casualty executives as part of its Tomorrow's Leading Non-Life Insurer report, and identified several key forces shaping the industry: poor shareholder returns, deregulation, changing customer needs and ebusiness.

    Its starting point is that pressure from shareholders is forcing insurers to look to mergers, alliances and ebusiness to offset the problems caused by overcapacity, low rates and rising claims costs.

    As a result, more consolidation will eventually lead to a reduction in capacity and a rise in pricing, which, combined with deregulation, will attract competition from banks and their non-financial players able to leverage customer relationships with stronger brands to enter the insurance market.

    “As ordinary insurance becomes increasingly commoditised and customers more demanding, companies will need to emphasise service and branding to differentiate their products and themselves,” said insurance head Ian Dilks.