Most insurers are struggling to reinvent their organisations for the future, according to a new report released today by KPMG International.
These insurers are faced with disruptive economic, demographic and technological change and only half of the insurers believe they can extract and sustain value from business transformation initiatives.
Fifty-seven percent of these insurers said that their transformation efforts to date have been less than ideal.
"Insurers have been trying to 'transform' their organisations for decades- yet very little has actually changed," said 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."
Although insurance executives understand the urgent need for transformation, many insurers are more focused on the implications of regulatory policy and not place enough attention on changes in customer preferences and needs.
Incremental change in organisations
Many insurers possess the skills and capabilities required to bring about incremental change in their organisation, 53 percent were capable of achieving short-term transformation wins.
The insurance executives increasingly view technology as a catalyst for change, with 47 percent saying that new mobile platforms and apps were forcing change in their business and creating new opportunities for transformation.
Forty-five percent said the same about social networking and collaboration and 41 percent said the same about data and analytics.
A third of respondents were watching organisations outside of the insurance sector, and those with disruptive technologies in order to find inspiration to help them reinvent their organisations.
The insurers are increasingly taking ideas, approaches and even talent from other sectors to help improve their effectiveness.
"It is heartening that insurers are facing the challenge head-on by proactively seeking new ways of doing business, including working with fintech start-ups," said Lau Kam Yuen, head of insurance at KPMG in Singapore. "This will enable them to compete effectively for consumers, who are increasingly more tech-savvy."
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