Nearly all (95%) U.S. insurance chief executive officers are confident about their growth prospects over the next three years, with new technologies and M&A seen as critical for sustainable growth. CEOs also indicate technology will help them improve the customer experience and provide on-demand products and services, according to the 2018 KPMG CEO Outlook survey.
“CEOs are confident in the economy and therefore bullish about their prospects for growth, focusing on core businesses and key markets,” said Ed Chanda, Insurance Sector Leader, KPMG LLP. “However, real growth will come as insurers take advantage of new technology, M&A and alliances to transform the way they do business and enhance the customer experience.”
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M&A to Drive Sustainable Growth
Forty-three percent of U.S. insurance CEOs indicated that there is a large appetite for M&A and strategic alliances to drive sustainable growth. Forty-seven percent also indicated that M&A would help reduce costs through synergies and economies of scale, as well as increase market share.
“With the emergence of more agile, technology-enabled competitors in the industry, insurance leaders recognize that now is the time to innovate and transform their business and operating models via strategy-aligned M&A, partnerships and alliances,” said Ram Menon, Global Lead Partner, Insurance Deal Advisory, KPMG LLP. “The goal is to rapidly gain access to innovative capabilities and technologies to effectively and efficiently engage their customers and achieve sustainable competitive advantages.”
Delivering on Transformation & Embracing Technology-Driven Disruption
As U.S. insurance CEOs focus on growth, 95 percent of them see technological disruption as an opportunity rather than a threat, and 85 percent say they are prepared to lead their organizations through radical transformation.
“Automating processes and using data and analytics to understand customer needs and build personalized products and services is not enough,” added Chanda. “Insurers need to ensure that the right technologies are implemented across the entire organization in order to derive the agility and efficiencies that make customized services possible.”
In order to transform into connected enterprises and personalize the customer experience, insurers need to collect and maintain a large amount of information from their clients. Ninety-three percent of U.S. insurance CEOs said that protecting their customers’ data is one of their most important responsibilities as CEOs. Seventy-three percent said they believe they are well prepared to face a cyberattack.
The Rise of the Digital Workforce
While U.S. insurance CEOs see technology skills as critical to supporting their organizations’ growth plans, six in ten, 63 percent, expect artificial intelligence to create more jobs than it eliminates.
“As robotics and automation become more prevalent, humans can shift from gathering information and preparing analyses to evaluating outcomes, solving problems and identifying opportunities,” said Chanda. “As companies engage in this transformation journey, they need to prepare their current employees for the transition with clear communication and training.”
KPMG’s 30th Annual Insurance Industry Conference
The pressing issues of growth, technological innovation, customer centricity, industry newcomers, M&A, and many more will be further discussed and analyzed by senior insurance executives and thought leaders at KPMG’s 30th Annual Insurance Industry Conference on September 12–13 at the Sheraton New York Times Square Hotel. To register, please click here.
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