Insurers should brace for “fast, relentless and potentially devastating” changes in the industry soon, says PricewaterhouseCoopers (PWC) Global Insurance Leader David Law.

Speaking at the International Insurance Society’s annual seminar in Rio de Janeiro, he said corporate boards “can still be quite narrow in their outlook” by focusing mainly on what is happening in their company and on what their main competitors are doing.

Instead, they should “look at the threat from new entrants coming in under the radar”.

He cited the many UK market comparison websites and how they have transformed car insurance to the stage that they now control about 50% of the private vehicle insurance market.

However, Mr Law is confident of insurers’ ability to innovate.

“One of the myths about insurance is that it is a relatively stable and unchanging industry,” he said.

“There is plenty of evidence to show that insurers are very conscious of the need for fresh thinking and new strategies.”

Research from PWC’s latest annual global CEO survey shows insurers ranking just behind the technology, communications and environment industries in their readiness to embrace new business models.

“These are not sectors that are usually mentioned in the same breath as insurance, so I think this is very encouraging,” he said.

Mr Law says the industry is changing, with power passing from the intermediary to the consumer and “the adoption of social media creating broader networks of like-minded affinity groups”.

“These trends will have deep implications for the design, marketing, pricing and servicing of insurance,” he said.

He describes technology as the “mega-trend” that could prove the most threatening, but says it also offers “the greatest potential for competitive differentiation”.

Mr Law says customers expect the same ease of access and use in their financial transactions that they get from their smartphones and tablets.

He warns that nimble start-ups or tech companies could catch out slower-moving, more mature companies. He says short-term priorities of these larger groups still revolve around enhancing operational efficiency and reducing costs.

“Clearly these are essential priorities, but simply doing what you do a little better may not be enough to guarantee survival and success,” he said.

“Being number one in your market offers no guarantee of survival. To stay in the game, you need to be thinking and acting at the same rate as technology and customer expectations are evolving.”