A new report from CBI/PwC has found that despite financial pressure from a large increase in the value of insurance claims over the past 12 months, insurers are still keen to expand their workforces and modernise.
Speaking to Insurance Business UK,
UK insurance leader at PwC Jonathan Howe said there are two main aspects of insurance that need modernisation. One is how they can improve their office workflow with new technology. Howe said insurers who can leverage this will likely see greater efficiency.
“Doing that can help take down those operating costs,” he said. “It will involve an upfront investment, but you need the right skills groups in order to apply some of these new technologies.”
Howe said insurers’ interactions with customers could also be greatly improved with technology.
“The experience they get when dealing online with some of the big retailers, for example, is not like the experience they have when they have to deal with their insurer,” he said.
“In a situation where there is a relatively flat demand for general insurance, and a lot of competition, then insurers want to differentiate themselves by the way they interact with their customers.”
The CBI/PwC financial services survey published today has also found insurers are fearing a shortage of people to fill these positions, a trend across many industries.
Insurers are also increasingly concerned about the potential of new entrants to the financial services market taking their business, although Howe said this might be an opportunity in disguise.
“One of the things I think is, traditionally, when companies have wanted those skillsets they try to recruit them,” he said. “I think we’re seeing a lot of very small and dynamic start-ups, InsurTech and FinTech companies, actually acting in these spaces and I think a lot of insurers will start to, rather than try to recruit people, partner with these organisations to deliver what they need.”
With the gradual increase of the value of insurance claims, total operating costs have also risen leaving customer service and efficiency a space ready for competition.
The survey also found the top three reasons life insurers are investing in the coming year are to comply with regulations, replace legacy systems and improve efficiency. General insurers reported their top three are efficiency, providing new products and reaching new customers.
Insurers are also optimistic for the UK’s capacity for financial services innovation thanks to access to talent and capital, the flourishing FinTech community and the strong customer demand for new products. UK Regulations were listed as a weakness.
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