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British brokers gain confidence

UK insurance brokers were more optimistic in the June quarter than earlier in the year, while overall financial services business conditions remained strong, according to a survey by PricewaterhouseCoopers (PWC) and the Confederation of British Industry.

Optimism was flat among general insurers and fell across the broader financial services sector, according to the survey.

Employment levels and investment in staff training increased significantly across broking, general insurance and the life insurance sector, and survey participants plan to lift IT spending in the coming year.

PWC UK Insurance Leader Jim Bichard says companies are going through significant changes as they prepare to transform their business models.

“This has driven an uptick in hiring and training the staff needed to implement new technologies and strategies,” he said. “To the extent that insurers have any discretionary spend, we are clearly beginning to see this money invested in technology directly impacting customer engagement, such as distribution and marketing.”

Artificial intelligence and robotics are likely to become more of a priority a few years down the line, he says.

Insurers expect a slowdown in spending on regulation over the coming year, but compliance spending is still expected to be substantial. The industry is assessing the implications of new global accountancy standard IFRS 17, which takes effect on January 1 2021.

“Insurers have done most of heavy lifting with [accounting regime] Solvency II and, as a result, we see many players, particularly in life and pensions, taking time to draw breath before embarking on the inevitable investment needed to adopt IFRS 17,” Mr Bichard said.

The quarterly survey of 94 financial services businesses was conducted before the UK general election on June 8.

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