General insurers face rising operating costs in UK
General insurers in the UK are general face higher operating costs due to IT investments, ongoing regulatory changes and a marked increase in headcount and training, according to the latest CBI/PwC financial services survey.
Competition both domestically and internationally is on the rise for general insurers with increasing pressure from other sectors of financial services and new entrants.
To stay ahead, general insurers are continuing to invest in IT to provide new services and reach new markets. As a result, general insurers report rising operating costs in part driven by ongoing regulatory changes, but also a marked increase in headcount and training.
“Under pressure and threatened by growing disintermediation, firms are looking at technology and new talent to help show and add value to their offerings,” said Jim Bichard, UK insurance leader at PwC. “This drive to invest and evolve their businesses is leading to increasing operating costs, a trend we’ve seen decrease over the past six months.
“Looking ahead, tech, talent and the skills appear as strong themes this quarter and nicely support the findings of our recent CEO survey. In fact, more insurance CEOs are concerned about the pace of technological change than any of other industry. Therefore, it is reassuring to see insurers maintain focus on their people and technology, looking beyond the uncertainty of today to grow their businesses.”
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