PricewaterhouseCoopers’ Analysis of the Insurance Industry
PricewaterhouseCoopers LLP has predicted that the insurance industry will be volatile for several years. According to the report, insurers are looking for ways to diversify their businesses and explore non-traditional distribution channels. While these changes are good for the future of the industry, they could also cause some insurers to lose their business. However, the changes may enable better-prepared insurers to excel.
In its report, PWC outlined nine key developments that will be shaping the insurance industry over the next five years. Some of these are related to changes in taxation laws and regulatory reform. These changes could lead to increased government oversight, which could affect the way insurers do business. Furthermore, a new accounting standard for insurance could require many actuarial forecasting models. The report also notes that financial reporting is not sufficient in the insurance sector, leading to uncertainty regarding the financial condition of companies.
As part of its analysis, PricewaterhouseCoopers LLP interviewed 43 financial analysts about current insurance financial reporting and discussed the issues they see. It found that insurers were more focused on customer needs than traditional distribution channels. Additionally, they were also less focused on traditional marketing strategies.
Moreover, the company’s research showed that the volume of announced insurance transactions declined from the previous six-month period. Of the 343 transactions that were announced during the period from mid-November 2021 to mid-May 2022, 189 deals were categorized as broker transactions. Other types of insurance transactions included life coverage, property coverage, and business interruption coverage. Although the deal volume was relatively low, the insurance industry continues to see mergers and acquisitions.
Despite the potential headwinds for the insurance industry, PwC LLP is confident that its network of professionals can help companies survive and thrive in this increasingly volatile environment. The firm believes that the mergers and acquisitions trend will continue to gain momentum, and that its clients will look to more diverse markets for growth. Overall, the report indicates that the competitive landscape will be different in the next five years, especially in light of increased government intervention and regulatory reform. Finally, it noted that mergers and acquisitions activity in the second half of 2022 slowed down significantly.
PricewaterhouseCoopers LLP has recently named Gavin Phillips as its new head of the London Market and Lloyd’s insurance group. He has over 15 years of experience in the insurance and reinsurance practice of the firm, and has been involved in due diligence and audits.
