if they are closely matched to liabilities. However, the Governments proposals were met with resistance from the UK insurance industry. The Association of British Insurers’ view was that the Government's proposed reform package was "significantly less favourable than the EU version of Solvency II" and the fundamental spread plan would create a "material Brexit penalty," leaving annuity companies worse off than they were under EU rules.
The UK Government still has ambitions to move away from the requirements of Solvency II, although it remains to be seen whether it will do so. In any event, any reforms are unlikely to be introduced before 2024.
Economic conditions
Market size for InsurTech-services and biggest companies in this business area
Some commentors expect the UK InsurTech sector to grow considerably. The size of the market is difficult to quantify, not least because of a lack of clear categorisation of what is “InsurTech”. Insurers have been using sophisticated technology (including, increasingly, AI) to assess and price risk and premiums. Such activity is not easily visible or measurable outside the individual insurance companies themselves.
Consumer facing InsurTech, such as market comparison apps, or automated premium pricing and allowing consumers to enter into insurance contracts (of various kinds, ranging from product insurance for new purchases, travel insurance, motor and household insurance) and business insurance (such as per journey policies for Uber drivers) without direct human engagement within the insurer, are more visible.
It is arguable that all insurance companies utilise FinTech to some extent, although some new companies (primarily intermediaries rather than insurers) are FinTech driven and can more appropriately be called “FinTech” companies. At this level, FinTech is more focussed on delivering insurance services rather than in the creating of the insurance product itself.
Additional comments regarding the economic situation for InsurTech-services or what InsurTech’s must be aware of in this business area
Please see above. The economic pressures now faced by many UK households may increase pressure on insurance companies to drive down costs, and so to embrace FinTech solutions, or open opportunities for new InsurTech innovations. The reduction of availability of intellectual capital (experienced personnel) to manage insurance business (and within the UK economy generally) as a result of Brexit may also lead to more insurance sector companies investing in FinTech solutions.