Public set to increase insurance spend
People are expected to spend more money on insurance products according to the latest CBI/PWC Financial Services Survey, which was published today.
For the first time in a year, optimism improved for general insurers, with many reporting a solid growth in business volumes for the second consecutive quarter. Expectations of future growth are at their highest since 2009.
Technology investment is expected to pick up again over the next 12 months, although investment in other areas such as employment and marketing will be muted, the survey found.
Employment was flat but this will pick up, alongside overall capital expenditure, over the next 12 months.
However, there were concerns raised over competition and how to best stand out from the crowd in such a competitive market.
Jonathan Howe, UK insurance leader at PWC, said, ‘The UK insurance market is defined by high levels of competition. As the UK economy improves and demand for insurance rises from both companies and private individuals, the confidence in new volumes of business will continue to be tested by ever increasing competition.
‘A tentative increase in optimism amongst general insurers reflects some of the conflicts present in the industry at the moment. Staff costs as a proportion of total costs have decreased, which is a trend we have seen developing over the past year, and reflects the industry focusing on their cost base and past investment beginning to pay off.
This is countered, however, by a rise in claims inflation. Even following a relatively benign winter, the increase in claims value will be seen as a worrying trend. Confidence that new business will come from private individuals is dented by ongoing concerns around competition in the UK market, which makes it surprising that there remains significantly more focus on acquiring domestic customers instead of those based overseas where more opportunity lies.’
Source: Post Online