While the study found the insurance industry has had a lower competitive intensity because of regulatory and capital requirements, "increased competition from outside the industry and other developments will impact competition in the future."

The report said action in several states to require increased commission disclosure and movement away from commissioned sales agents to direct channels suggests a potential increase in competitive intensity.

Commission disclosure, the report said, will drive down commissions on more expensive products, and companies will be pressed to design products that "have a clearer value to the consumer."

Federal legislation being contemplated for regulation of the industry, Deloitte suggested, could make it easier for new competitors to enter the market by alleviating administrative burdens, but this could be offset by tougher minimum and solvency requirements.

Alice Kroll, a Deloitte director and one of the authors of the report on insurance, said Deloitte is promoting the notion that customers should be able to reach companies whenever and however they want to--in person, by instant message or other methods. "There is multifaceted communications potential," she said.

Deloitte said that the insurance marketplace is experiencing a changing demographic, with customers becoming more involved in the purchasing process and becoming less loyal to brand particularly in property and casualty.

The firm predicted that as members of the Gen X and Gen Y demographics become an increasingly powerful customer segment, they will likely demand transparency in price, service and features--with more direct competition being the probable result.

Insurers, the report noted, are struggling "to attract top talent to the industry and are dealing with issues arising from an aging workforce (e.g. loss of institutional memory as workers retire) [and] these difficulties in attracting talent and recruiting a fresh workforce to the industry may inhibit future growth and innovation in the industry."

Kroll said, "Successful companies need to portray themselves as exciting places to work with opportunities for employees to fulfill their creative needs not just the company's."

According to the report, firms on the cutting edge "are exploiting smartphone technology to link agents, customers and companies and employing advances in financial economics and computing power for more sophisticated financial and risk management."

Those companies that are effectively deploying technology to better connect with the customer "could result in a greater performance gap between the top and bottom performers over time," said Deloitte.

The report found the life insurance sector was generally lagging behind P&C in applying technology.