A struggle between insurers and brokers is likely to erupt as product manufacturers try to wrest control of customer interactions from intermediaries, a report warns.

Consultant PwC says the fight will develop as insurers look to arrest a long-term decline in profits: average earnings before interest and tax at the top 29 global insurers are declining by 9% a year, while the Australian market’s slowdown is even worse.

As insurers try to capture more revenue from consumers through personalised products adjacent to insurance, they will need more control over the customer.

Insurers can develop a needs-based customer proposition by stepping into asset management, banking, health insurance and annuities, the paper suggests.

Those in mature markets may suffer a 50% decline in profits within five years if they do not act amid “inherent volatility associated with pricing cycles, the increasing pace of innovation and other disruptive challenges”.

It says net annual premium growth in Australia is “slow and volatile” because of downward pressure from risk improvements such as driverless cars and connected homes, which means lower claims frequency.

Globally, there has been only 2.5% growth in gross written premium in the past 15 years, and insurers have not found large-scale efficiencies to offset slowing growth, PwC says.