UK insurers see competition a bigger threat than Brexit in 2017, survey reveals

Competition is cited as the biggest challenge to business by general and life insurers in the UK, according to a CBI-PwC financial services survey.

Insurers have highlighted growing concerns about a threat from new entrants and competition from other areas of financial services. As a result, there has been continued investment in technology throughout the past year to acquire new customers and improve efficiency. Additionally, insurers are continuing to prioritise strategic partnerships for their growth strategies.

On Brexit, insurers believe the biggest impact the UK’s negotiations with the European Union will have on their business is an increased intensity of interaction with regulators.

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

"Investment in technology has been an ongoing trend in the industry and, by increasing efficiencies and reaching new customers, insurers are hoping to stave off competition."

Optimism in the UK insurance industry fell last quarter due to concerns around the economic and trading environment, according to the survey.

Geopolitical and economic factors are not the only worry as insurers experience a sluggish return on investment, driven by rising claim costs and falling profits.

"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," Bichard said.

"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 skillsets they need to thrive in this ultra-competitive market."

More than 83 percent of UK bosses are concerned about how to get hold of key skills, up from 71 percent in 2016.

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