A data “arms race” and the decline of physical assets are preying on the minds of insurer chief executives.

They say the commercial premium pool isn’t growing and there are concerns about drops in the value of assets to insure on both the commercial front and in personal lines, as more Australians swap a house and land for an apartment, and their car for the car pool.

Finity Consulting MD Estelle Pearson recently interviewed seven insurer CEOs about the industry’s future challenges.

She told a panel discussion at last week’s Actuaries Institute general insurance seminar the executives fear the commercial premium pool may begin to shrink because of the subdued economy and an oversupply of capacity.

They cite Lloyd’s, underwriting agencies and reinsurers bringing new capacity into the market and see no correction for a few years.

Some industry observers say a $US250 billion ($286 billion) event is needed to correct the market.

Ms Pearson notes losses in two recent big catastrophe years combined – 2005 and 2011 – were below $US150 billion ($172 billion).

CEOs also raised concerns at the declining value of physical assets held by businesses.

“As physical assets become a smaller part of people’s businesses… traditional insurance products may become less relevant and the challenge is to develop products that cover intangible assets,” Ms Pearson said.

Insurer executives are closely watching the move to driverless cars. The UK will have the first such vehicle available in less than a year and this, plus telematics, should bring a reduction in collision frequency – along with calls for lower premiums.

“Add to that community attitudes to car ownership and the younger generation wanting to car-share,” Ms Pearson said.

“The size of the assets being insured in that market is being reduced and they can see significant shrinking of the motor premium pool over the next 10-20 years.”

Meanwhile, challenger brands are starting to gain scale, so their costs are reducing.

One CEO described moves to make better use of data as an “arms race” in which no one can afford to fall behind.

Finity Principal Geoff Atkins told the seminar the challenge “is not about the data you have, it is about the data other people own, and it is not necessarily easy to get access to it”.

This may include information held by real estate agents and car companies, he told insuranceNEWS.com.au later.

The data insurers most want may not be available at an economic price.

While consumers want to transact on mobile devices, insurance executives ponder the challenge of making products usable, quick and easy for customers who don’t want to click through multiple screens.

Insurance Council of Australia (ICA) GM Consumer Relations and Market Development Vicki Mullen told the seminar the industry is challenged by the need to interact more closely with consumers and provide the information they need.

ICA’s Ask an Insurer helpline highlights people’s diverse needs, with enquiries about cover for mobility scooters, body parts and 21st birthday parties.

Ms Mullen says the trend towards using private assets for commercial purposes, such as car-sharing and renting out rooms to tourists, presents challenges and opportunities for insurers.

State and local council regulations dictate whether or not these activities are legal.

“If the activity is legal and the consumer is using it for commercial gain, how does a retail policy respond when something goes wrong?” she said.

“I don’t think consumers are thinking about this and ICA is building up capacity to inform consumers to beware and question whether or not they are covered.”

Ms Pearson says the pace of change is a recurring theme for many CEOs, and they fear not being agile enough to respond.