Like the rest of the financial services industry, the insurance market is being transformed by technological advances. Major players are investing heavily in technology which not only increases their service levels to consumers, but which also improves their own operational efficiency and risk assessment accuracy. At the same time the increasing use of automation algorithms and big data sets is cutting the number of people the insurance industry actually needs to employ.1
A pick-up in the European economy combined with attractive growth opportunities in segments such as healthcare, group insurance and accidental death insurance, is leading to continued strong prospects across the continent. For instance, in France total contributions collected by insurers is forecast to increase from €209.6bn in 2016 to €211.6bn in 2017 with insurers particularly benefiting from growth in these new segments.2
Although data analysis has been used for many years across the industry, Artificial Intelligence (AI) rapidly expands the amount of data that can be analysed and has the power to completely revolutionise the industry as insurance specialists are replaced by machines. AI also has the potential to improve claims processing and help prevent fraud.
The need for growth is driving significant consolidation across the industry. Competition, especially in the UK, has led to premium deflation. To counter this, leading players are turning to M&A to drive growth and returns.