Cyber risk top concern for UK insurers: PwC

Cyber risk is the top concern for UK insurers, followed closely by the global concern of burgeoning regulation.

This is according to the annual ‘Banana Skins’ survey of perceived risks to the sector by the Centre for the Study of Financial Innovation (CSFI) and PwC.

“The UK insurance industry shares the global concern about burgeoning regulation, particularly its cost and distraction, but also its potential to damage the international competitiveness of London as the world’s insurance capital if it is heavily ‘gold plated’,” said PwC.

Most of the risks in the top ten centre on the rapidly changing insurance risk landscape and the new challenges facing the industry, with the ability of the industry to handle these changes seen as a huge risk in itself.

Change management is the third biggest worry for UK insurers, and concern about the industry’s ability to attract talent is also higher than the global average.

However, concern about the macroeconomic situation and the outlook for interest rates is much lower than the global average. The outlook for investment performance is also seen to be stronger by UK insurers, according to PwC.

Stephen O’Hearn, PwC global insurance leader, said: “The long-term prospects for the insurance sector are positive as people around the world live longer and have more wealth to protect. Yet insurers also face the disruptive impact of new technology, changing customer expectations, more exacting regulation and enduring economic uncertainty.”

Mark Train, PwC global insurance risk leader, added: “The ability to identify and manage emerging, as well as familiar, risks is at the top of the boardroom agenda and will be one of the key differentiators for success in a marketplace that offers considerable long-term opportunities, but also disruptive threats.”