­ PwC Global InsurTech Report – 2017 Challenges can lead to opportunities Investing in InsurTech related projects can be an opportunity With InsurTech’s spread across the sector, regulators and Figure € Challenges the insurance in‚ustr† aces in their for insurers to expand their products and services, increase policy makers have begun to focus on these developments. abilit† to innoate their customer base, and leverage their analytical capabilities. For example, there is growing concern in Europe surrounding Curiously, incumbents responded that they expect to see a 13% the unintended consequences that come from an over-reliance return on investment (ROI) on these projects, substantially on data analytics, such as higher risk policyholders being priced lower than the 20% expected by the overall Financial Services out due to more accurate information. industry. We wonder if these more modest expectations, closer to product pricing expectations, reflect the mainstreaming of Further concern regards new data privacy rules, such as the innovation investment throughout the insurance sector. General Data Protection Regulation (GDPR), and the possible conflict with innovative digital strategies. Much of this is yet Talent is a key issue for insurers, with 87% having trouble in to be tested, and while the full force of GDPR is still largely hiring and, even more so, retaining people with the right skillset conceptual, insurers should be aware of the possible implications to innovate (see Figure 5). In fact, 38% find it very difficult to do to their digital strategy. so, compared to 28% of respondents from the banking sector. Insurers can attract talent by acquiring from startups, partnering As InsurTech grows, we are also seeing a rapid rise in RegTech, with innovators, and fostering internal talent. However, most with organisations increasingly looking at technology that can ­7 3 €3 4€ 43 companies will need an updated staffing model in order to help them address these regulatory and compliance obligations develop their talent accordingly. more efficiently and effectively. There are numerous existing pain points in regulatory functions where RegTech can help, IT security is also a pressing concern when taking into from client onboarding and compliance monitoring to regulatory consideration the increase of consumer and risk data. Acquiring reporting and fraud prevention. While the banking industry is Talent Šata storage‡ ˆT security Šigital identity ‹ew business or partnering with InsurTech companies can mean that perhaps ahead when it comes to their interaction with RegTech privacy and authentication model traditional insurers’ legacy IT systems are introduced to new companies, it is likely that insurers will follow due to the cost protection regulations regulations exposures and risks as they are integrated with new, often and headcount savings that RegTech can provide. regulations cloud-based platforms. €ource‚ ƒw„ …lobal FinTech €urvey ­†‡ ˆnsurance €ector ƒarticipants