Insurance agents under threat from the net
Insurance agents’ livelihoods are under threat from a growing number of internet start-ups seeking to replace the traditional model. An article in Sunday’s New York Times quotes Ellen Carney from Forrester Research who says that: “There are 40,000 agencies in the U.S., and you could absolutely imagine them shrinking by a quarter, and the ones that are left will deal with more complicated needs and more affluent customers.” Although internet-based insurance portals are relatively new in the US they are common place in the UK and much of Europe. Google has recently teamed up with the US division of a British company that has been operating in the space for a decade. The vast majority of the comparison sites in Europe have targeted the B2C market, they are now also moving into commercial lines. However there have been stories the sites not offering the best deals as agreements with insurers can cloud the results and some insurers refuse to be listed on the sites at all in favour of selling directly through their own sites or via agents. Their existence though means that agents and brokers need to stay ahead of the game and build strong relationships with clients to mitigate the effect of the faceless online start-ups.
Optimism among insurers down at end of last year says PwC
There was a drop in the optimism of life insurers according to the latest Financial Services Survey from PricewaterhouseCoopers. The poll shows that in the last quarter of 2014 costs grew in the sector, which meant that although sales volume increased profitability declined. Among general insurers there was also an increase in sales volume and profitability was also up but growth is not expected to be strong this quarter. Again, overall optimism among general insurers is down. The PwC research, conducted in the UK, highlights increasing costs for insurers from tighter regulations and the higher costs expected from investment in IT. Jonathan Howe of PwC said this investment has the aim of increasing profitability: We see this as a way of improving profits through investing in efficient systems within an industry where demand for general insurance services is constrained.”
US and UK enter into cyber wars
The United States and the United Kingdom will launch unprecedented cyber-attacks on each other within the year. There’s no need to panic though as the moves have been agreed by President Obama and British Prime Minister David Cameron as the two countries work together to combat increasing cyber threats. The two nation’s intelligence and security agencies will work together in a bid to better understand the risks and how to deal with them. The first of the dummy attacks will focus on the finance sector and will take place later this year. A group of online security firms has also announced greater co-operation; Palo Alto Networks, Intel Security, Symantec and Fortinet will collaborate to develop the best possible defenses against online threats.
