Majority of insurers admit challenges extracting value from transformation initiatives; most say their transformation efforts have been less than ideal
Faced with disruptive economic, demographic and technological change, most insurers are struggling to reinvent their organizations for the future. According to Empowered for the future: Insurance reinvented, a report released today by KPMG International, only half of insurers polled believe they are capable of extracting and sustaining value from business transformation initiatives. Fifty-seven percent admitted that their transformation efforts to date have been less than ideal.
“Insurers have been trying to ‘transform’ their organizations for decades– yet very little has actually changed,” notes Mary Trussell, KPMG Global Lead Partner for Insurance Innovation & Change and lead author of the report. “If insurers are to truly ‘reinvent’ their business and position themselves for success in a world of disruptive innovation – they will need to make more fundamental changes to their business and operating models than ever before.”
The report was launched during the International Insurance Society’s Global Insurance Forum 2016 in Singapore (12-15 June) where industry leaders and executives gathered to discuss innovation and industry transformation.
Putting the customer first
According to the KPMG report, insurance executives clearly understand the urgent need for transformation. However, it finds many insurers are more focused on implications of regulatory policy and may not be placing enough attention on changes in customer preferences and needs. Less than a quarter of respondents expect their operating model to be disrupted by changes in customer behavior.
“We’d suggest that customers should be the inspiration for insurers’ efforts to reinvent themselves,” says Mary Trussell. “In a highly regulated sector, treating changes in regulation as a springboard to enhance the business for customers rather than something to be endured distinguishes players at the top of their game. The data suggests that many insurers may not yet have their eyes on the ultimate prize.”
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