PWC: UK insurers could bag £49.5bn ‘disruption’ boost by 2030
The UK’s financial sector is predicted to be in line for £100 billion increase in new business by 2030, as technological advances collide with macro-economic and behavioural shifts, PWC has said.
In its report, “Harnessing the power of disruption”, the consultancy firm found that out of a total of £106 billion of estimated new business almost half, £49.5 billion, would be driven by insurance. The growth is predicted to come from service developments as companies work to meet changing consumer habits.
The report said that emerging risks and new tech could “drive disruption in commercial lines insurance equivalent to 25 percent of current revenues”, with an estimated market uplift of £27.6 billion by 2030. While disruption opportunities in the life and pensions sector could benefit the market by £15.7 billion.
Nearly a quarter, 24 percent, of the personal insurance market could be disrupted by 2030 due to the changing nature of risk and better data, it said, resulting in a £6.6 billion increase in business.
The report said that “new entrants” were already capitalising on the demand for new, more customer-centric and digitally enabled services. It highlighted the rise of apps supported by AI-driven digital assistants that allow customers to buy and manage their home and rental insurance policies.
Analysts said that as consumer habits “continue to evolve rapidly alongside major advances in technology, industry giants, who still hold the customer share advantage, will vie with start ups and major tech firms for the new business”.
Shazia Azim, head of strategy and financial services COO at PwC, said: “Our analysis shows an upswing of more than £100bn by 2030, if sector incumbents and new entrants successfully horizon scan evolving consumer needs across key areas including insurance, SME lending and asset management.
“FinTech presents a fantastic opportunity for financial services businesses to harness technological disruption and help shape the future of the industry. Crucially it helps level the playing field for those start ups and scale ups using and developing cutting edge technologies. As a result, these newer players will be better equipped to battle for market share with the larger firms still adapting to the rapid pace of change.”
Alan Gemes, senior partner at Strategy&, PwC, said: “It’s clear that firms operating in a sector where the consumer is becoming more sophisticated and more demanding will have to embrace technological disruption – or be disrupted themselves.”
