A new survey reflects rising levels of confidence amongst general insurers, despite expectations of another challenging year in 2021. Optimism amongst life insurers remains flat, which is still a significant improvement on recent quarters.

These are the findings of the latest CBI/PwC Financial Services Survey, whose authors believe the stark turnaround in sentiment could pave the way for an acceleration in customer-led transformation. It won't all be plain, sailing, however, as regulatory intervention and economic uncertainty persist.

Insurance brokers are now reporting rising profit expectations, and although life insurers are less positive, they too report that volumes are only 2% down on normal, while anticipating significant increases in business over the next three months. In terms of how they anticipate their business transforming, life insurers see regulation as by far the biggest disruptor, with an additional strong focus on cost reduction ahead of product development and responding to changing customer demands.

Alex Bertolotti, PwC UK's insurance leader, said: "While efficiency and risk management are clearly critical, transformation strategies must keep pace with changing customer expectations. That these shifts have been accelerated by the impact of COVID-19 cannot be understated and firms that make the most of available data hold the key to understanding what customers really want.

"We're seeing changes in customer preferences and behaviour so it makes sense to see these drivers feature strongly in how insurers plan to respond in the future. What's crucial is to turn this appetite for change into progress on the ground.”

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