Established insurers will face a squeeze on profits and market share as new financial technology companies muscle in on the industry, a senior European Union official said on Wednesday.

More fintech firms are expected to offer insurance, helped by the impact of the coronavirus crisis which has encouraged the swifter adoption of new technology in the workplace and business, said Martin Merlin, the European Commission’s director for banking, insurance and financial crime.

“The insurance sector will need to innovate and adapt itself in order to keep its market share,” Merlin told a panel at the Reuters Events Future of Insurance Europe conference.

Insurers and reinsurers such as AXA and Munich Re have been investing in so-called insurtech companies, considered a faster way for them to adapt to technology changes.

Stephen Catlin, chairman and chief executive of Convex, a newcomer to the insurance, told the event that fintech firms faced a learning curve to compete with established players.

“I’ve been approached by many fintech companies and so often they have very little appreciation of the industry,” he said.

Merlin also said climate change risks were likely to be similar across regions, making it tougher for insurers to diversify their risks.

“That is a difficulty that large insurance companies typically would have to grapple with,” he said.