[Skip to content]

Sign up for our daily newsletter
The Actuary The magazine of the Institute & Faculty of Actuaries
.

Technological disruption to provide £100bn boost for financial services

The UK’s financial services sector could enjoy a £106bn boost by 2030 as a result of technological advancements, changing customer behaviour and demographic shifts.


20 MAY 2019 | CHRIS SEEKINGS
web_futuristic_money_iStock-1093674926.png
Beginning of a disruptive change ©iStock


That is according to analysis by PricewaterhouseCoopers (PwC), which suggests that insurance, savings and investments will be among the areas most impacted.

For example, almost a quarter of the personal insurance market could be disrupted by the changing nature of risk and better data, resulting in a £6.6bn boost.

Of the total £106bn of predicted new business by 2030, PwC estimated that £49.5bn would be driven by insurance firms looking to meet changing consumer habits.

“Consumers and businesses using innovative products want more tailored, more efficient and more secure technology,” PwC head of financial services, Andrew Kail, said.

“We’re only seeing the beginning of the disruptive change that will change the face of every sub-sector, from insurance to asset management, from transactions to pensions.”

The analysis suggests that emerging risks and new tech could drive disruption in commercial lines insurance equivalent to 25% of current revenues, leading to a market uplift of £27.6bn.

Disruption opportunities in the life and pensions sector could also benefit the market by £15.7bn.

PwC said that industry giants with a customer share advantage would vile with start-ups and major technology firms for new business as consumer habits change.

However, the analysis suggests that technology, regulation, funding, access to talent and the ability for customers to switch providers all make it easier for new entrants.

“Newer players will be better equipped to battle for market share with the larger firms still adapting to the rapid pace of change,” PwC head of strategy, Shazia Azim, said.

“It’s clear that firms operating in a sector where the consumer is becoming more sophisticated and more demanding will have to embrace technological disruption – or be disrupted themselves.” 

Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession