Nearly three-quarters of reinsurance and insurance chiefs are worried about the prospects of a slump in business in traditional markets, research from financial services firm PwC has revealed.

The PwC survey found that almost half of those surveyed saw a bid to increase market share as the main opportunity to grow their businesses in 2014.

And 44 percent of business chiefs said they thought the global economy would grow over the next year — but that it would take time before investment performance could make a significant contribution to returns on investment for reinsurers.

A huge 86 percent said advances in technology would transform their businesses over the next five years, while nearly three quarters said that demographic shifts, like a redistribution in the world’s workforce from developed to emerging economies, would need better anticipation of reinsurance needs of a changing customer base.

In addition, more than half of CEOs saw the shift in global economic power to new world players over the next five years as a major trend.

The PWC report said: “Reinsurance penetration has been challenging in emerging economies with insurance penetration representing less than three percent of Gross Domestic Product (GDP).

“Making money has been difficult for western reinsurers in markets where competition is mounting, foreign ownership may be restricted and limited data can make risks difficult to price and manage.

“After all, profitability is possible only if there is sufficient risk data to ensure pricing accuracy and adequacy.

“New ways of assessing and pricing risks will be necessary to contend with often limited risk data, different legal systems, regulatory frameworks and business practices and the potential for political instability.

“For commercial risks, rather than trying to capture the risks within an entire market, it might be more manageable and effective to concentrate on particular industries.”

PwC Bermuda insurance leader Arthur Wightman said: “Global economic recovery remains fragile but CEOs are more positive about the state of the global economy than they were last year.

“Reinsurance CEOs are concerned about how or whether this recovery will trickle down into better prospects for their own companies.

“In fact, these CEOs are looking past the anticipated margin contraction in 2014 to three bigger trends that they think will transform their business in the next five years — technological advances, demographic changes and shifts in global economic power.”

But the report showed that 60 percent of CEOs said that the speed of technological change as a potential threat because ease of access to analytical tools and data could mean “areas of the market will inevitably become more commoditised as the capital requirements and sophistication of participants represent lower hurdles.”

Mr Wightman said: “The importance of innovation, differentiation and customer relationships will increase in a marketplace that is facing as much change over the next five years as the last 50.

“Reinsurers that are already embracing this will stand to weather competitive challenges on a nearer term basis.”

The predictions were contained in the PwC annual global CEO survey, the 17th of its kind. Among the CEOs canvassed were 74 reinsurance and insurance chiefs in 39 countries, while further in-d[eth interviews were conducted with chief executives.

The survey also found that 60 percent of chief executives said a lack of trust in the industry posed a threat to their future, but it added that results showed that “the industry’s determination to re-engage with customers, governments and society as a whole”.