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UK life insurers report strong business volumes: PwC

27th September 2017 - Author: Staff Writer

UK life insurers reported an optimistic outlook with strong volumes of business in the last three months – a contrast to insurance brokers who saw their market position stagnate as growth stalled for the first time in four years, according to the latest CBI/PwC financial services survey.

Longevity imageThe thriving life insurance is an exception to the market trend; general insurers’ business volumes grew at their slowest rate in two years.

All three sectors plan to step up their marketing and investment spend, with the focus being to drive efficiency improvements, regulatory compliance, providing new services and expanding capacity.

UK Life and general insurers have grown the size of their firms and invested in technology in a push to attract the right talent and improve platforms to focus on productivity and customer friendly products.

Jim Bichard, UK insurance leader at PwC, said the rise in employment numbers is a positive trend for the industry “although there is a strong underlying concern about a lack of available talent.

Some firm’s are dealing with the scarcity of talent by stepping away from permanent employment in some circumstances.

“Insurers, and the people working for them, are beginning to explore the gig economy by choosing teams with specific skill sets on a temporary project basis,” Bichard explained.

Regulation and level of demand impacting business are cited by PwC as top concerns for life insurers while general insurers and brokers reflect concerns of the wider financial services sector about competition and availability of professional staff.

Bichard commented; “There’s a clear difference in optimism levels, highlighting the diversity of challenges and opportunities facing the industry at the moment.

“Commercial insurers in particular are acutely feeling the impact of the current soft market, with rates arguably at an all time low. A downturn in business volumes for general insurers could be linked to the wider economic climate, as households focus on tightening their belts.

“A number of life insurers have made fundamental structural changes recently as some big players choose to position themselves more in the asset and wealth management space. These are examples of the industry adapting to change and strategic plans being put into action. It is a trend we expect to continue – the traditional life insurance market is changing.”

The PwC report demonstrates that this year so far has been a period of fundamental change for the traditional life insurance market, as firms readjust structurally to accommodate and invest in new technology and personnel.

Analysts have previously highlighted the potential opportunity for reinsurance companies to take advantage of life insurers’ increasing capital needs and also their ability to assist with the technological transformation of the life re/insurance industry.

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