Technological intervention in the non-life insurance space is a prime concern for general insurers globally, says a recent PwC and Centre for the Study of Financial Innovation (CFSI) report titled ‘Insurance Banana Skins 2017’.
Close to 836 insurance practitioners and industry observers from 52 countries across the globe participated in this survey. The report identified various risks concerning the non-life insurance firms globally pertaining to the insurance industry.
The report says, “On the non-life, the risk agenda is dominated by concerns over technological change and how to address it, specifically the entry of new forms of competition and distribution.” General insurers globally need to keep their eyes open for new entrants who use cutting-edge technology in conducting business operations like servicing and distribution of insurance policies that help them create a strategic advantage.
Another major concern cited by majority of the non-life insurers was growing cyber risks in the industry. It has a double-fold effect, firstly, with regards to the high security risk associated with the confidential data of policyholders and secondly with the cost of underwriting cyber crime.
The survey also found that general insurers are worried about the changing regulatory norms. Regulation continues to be seen as a high risk in the non-life space because of the cost and the complication that comes in after an amendment or new regulation. The insurer then needs to make the changes in its business operations accordingly which is a difficult task.
In India, as the insurance industry is still evolving, general insurers have yet to deal with disruptive technological changes. However, changing regulatory norms have always been the cause of concern for most of the general insurers.
Krishnamoorthy Rao, CEO, Future Generali Insurance cites few more concerns for general insurers. He says, “The lack of profitability and increasing underwriting losses is currently the biggest concern for general insurers in India. Also, it is difficult to keep up with the regulatory changes that happen frequently.”