Reinsurance News

Competition, not Brexit, biggest threat to UK re/insurance: CBI/PwC

23rd January 2017 - Author: Staff Writer

Competition, not Brexit, is named the biggest challenge to the re/insurance industry in the UK in a CBI/PwC Financial Services survey released today.

Despite changing political and economic factors making for complex navigation of the British insurance and reinsurance market, stiff competition from new entrants and other areas of financial services is the number one concern.

The report shows a sluggish return on investment, rising claim costs, falling profits, and concerns surrounding the economic and trading environment cast a gloomy shadow over the UK  industry last quarter.

The industry experts surveyed believe Brexit’s biggest impact will be felt by an increased intensity of interaction with regulators.

Jim Bichard, UK insurance leader at PwC, said; “UK insurers have told us they view competition from both new and established players as a bigger challenge than Brexit in the year ahead.

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“Although optimism has been dampened as a result of wider geopolitical and economic uncertainty, these results show insurers are dealing with many business issues, of which Brexit is just one.”

Re/insurance companies are taking steps to secure their future in a competitive market through investing in technology and prioritising strategic partnerships for growth.

Speaking of the trend to invest in new technologies, Bichard said; “by increasing efficiencies and reaching new customers, insurers are hoping to stave off competition.”

And while competition is seen as the main obstacle to higher rates of profitability, on an organisational level, the PwC Global CEO Survey – published this week at the World Economic Summit in Davos – highlighted being able to find key skills as the single biggest business threat to organisations.

According to latest figures, more than four-in-five UK CEOs (83%) cite difficulty finding talent with the right skills – a number that has risen considerably from 71% last year – and compares to 77% globally.

Bichard commented that for re/insurers, forming partnerships with start-ups has become an innovative solution to the challenges ahead – not just for business expansion – but also for connecting with fresh ideas and skills; “Availability of talent continues to be on the minds of insurance professionals; partnering with new entrants and start-ups is one way in which we see insurers accessing the diverse skill sets they need to thrive in this ultra-competitive market.”

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