Global survey suggests the need for insurance CEOs to accelerate their transformation and innovation efforts to remain competitive.
KPMG asked more than 100 insurance CEOs about their plans and concerns over the next few years, and what we heard reveals some surprising insights. This report highlights the top-level findings and how insurance CEOs will need to pick up the pace of transformation and innovation if they hope to remain competitive in this rapidly-evolving market.
Insurance CEOs may have lost some confidence in the global economy amidst the current geo-political and economic landscape, but most of them (85%) remain confident about their own company's short-term growth prospects. While many believe they can outperform the market over the next year, our survey suggests they are much less confident about the future, with the majority of CEOs expect less than two percent topline growth over the next three years.
In some cases, insurers have reason to be confident in the short term. Many feel that they have made great efforts to transform their capabilities and improve their customer focus. Despite their progress, many are focused on incremental change rather than large-scale, enterprise transformation required to truly reinvent their customer preposition. Nonetheless, it is a positive sign that the majority of CEOs view technological disruption as an opportunity, rather than a threat, to create competitive advantage and improve their operations.
As insurers start to transform their organization and embrace new models and technologies, new risks emerge. Emerging technology risks rose to top the list of concerns followed by operational risks, suggesting that CEOs are worried that their transformation initiatives may be straining their business and operating models. In response, insurance CEOs seem to be shifting their strategic priorities to focus on fostering innovation, become more data-driven, and implementing disruptive technologies.
While many CEOs admit concern about the future and emerging technology, less than half of them plan to increase investment into innovation and emerging technologies over the next three years. Our view is that many are struggling to balance the need to invest against the challenges of the current low profit margin environment.
To ensure investments are targeted towards driving future growth, insurers need to look for greater efficiencies from the business and achieve greater understanding in new customer segments, geopolitical trends and disruptive channels. Insurers will also need to form more sophisticated ecosystems by working with a variety of external partners.
Ultimately, insurance organizations need to accelerate their transformation efforts if they hope to live up to their growth and transformation ambitions. Here are five key takeaways as insurance CEOs prepare to disrupt and grow:
We hope that this report provides insights to help you deliver results today but also anticipate the changes you may have to make to be successful in the future. If you have any questions about the survey results and ideas, or would like to discuss how KPMG can help your organization achieve greater success, please do not hesitate to contact your local KPMG advisors.
Go beyond the headlines
In September, our financial services and insurance leaders will launch an online article series to provide in-depth analysis of the top risks, emerging trends and uncover new strategies that will help drive transformative change within the insurance industry. Stay tuned!