Insurance companies and technology start-ups can take advantage of each others expertise and talents, according to a report published today.
PwC said 75% of 79 insurance senior executives believed that the biggest impact on the industry would come from building products that could address the changing needs of the customer.
"Incumbents see these new products as an opportunity to redefine customer interaction," said PwC.
But the consultancy has since said the best way forward was partnerships between insurers and start-ups to "take advantage of each other's diverse range of talents" and "break down the disconnect in priorities and approaches".
"By focusing on what insurers consider to be the main challenge for the insurance industry - providing customers with the most suitable product - insurtech start-ups can work alongside incumbents to effect swifter change," said the firm.
The report also highlighted the potential of start-ups helping insurers reduce cost and improve efficiencies through the use of data analytics.
Jonathan Howe, UK insurance leader at PwC, said: "If insurtech start-ups and incumbent companies can successfully work together to build new and relevant insurance products while cutting their operating costs and passing some of these savings on to the customer, it is not just an opportunity to increase profitability, it is a real chance for insurers to build and retain trusted relationships with customers."
The consultancy added that the majority of new players did not seek to replace existing insurance companies but considered themselves as 'enablers' rather than 'disruptors'.
Sabine VanderLinden, managing director at Startupbootcamp InsurTech, said: "The insurance industry is slowly waking up to the inevitability of change around it and start-ups are looking to facilitate, rather than hinder, change. The key will be working together."