Faster, more tailored and better value insurance is on the way for Kiwis
KPMG has highlighted the need for traditional insurers to adapt or innovate, as it’s only a matter of time before peer to peer (P2P) insurance comes to New Zealand and insurers are left competing with the likes of Apple, Google and fast moving start-ups.
The firm also warns that a range of traditional insurance roles will dramatically change or become obsolete. The actuarial profession will be radically restructured by Artificial Intelligence (AI) and cognitive computing driven by complex algorithms that produce outcomes in significantly less time, requiring significantly fewer staff hours.
Multiple layers of bureaucracy and inefficiency via traditional roles played by brokers, underwriters, agents, lawyers and banks may be wiped out by blockchain according to an upcoming report by KPMG, entitled Empowering New Zealand for the Future.
“Faster, more tailored and better value insurance is on the way for Kiwi consumers” says Steve Graham, Head of Digital Futures at KPMG. Steve leads KPMG’s Digital practice, specialising in foresight, innovation and design thinking.
He says “if you are an insurance company in New Zealand with an unwieldy or legacy IT system/(s) and unable to respond to market conditions things are going to be very problematic.
Even if companies have spent a lot of money on legacy IT systems, new players are emerging that have systems that will eclipse the old in the same way that cloud based business models upended the music industry. Media, photography and music have all been re-engineered and insurance is now underway – it’s a sector that touches everyone.”
According to Graham “New Zealand insurance companies are well placed to lead and develop new models for insurance because of a range of factors local to New Zealand. The Kiwi mindset, attitude and culture is important because New Zealanders have a drive to innovate, adapt and improve, and these attributes must be leveraged. We’ve seen it already in products like SmartDriver from TOWER and innovative new cyber security products developed here.
New Zealand also has a burgeoning technology eco-system that is collaborative, supportive and advanced that companies should be tapping into. Alongside this, companies need to be finding those people inside their organisations who are the rebels, challengers, and visionaries, those often hard-to-manage employees and rope them into change projects.
Finally, companies should create their pathway rather than spend all their time trying to predict the future. Insight driven creativity will help insurance companies thrive. If they do not re-imagine a future built on emergent technology and customer driven business models, they risk being left behind. Young innovative start-ups which can target and scale quickly at less cost and therefore offer much improved premiums to consumers are arriving.”