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KPMG Report Says Insurance Sector Needs Drastic Measures to Reinvent Itself

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A new report by KPMG report shared data that could be alarming for some people. The report shared that only half of the global insurers who participated in the poll believe that they can extract and sustain value from business transformation initiatives. Furthermore, 57% of the poll respondents admitted that they have had less than successful in their transformation efforts.

The report was released through Forbes Insights and featured the results of the survey wherein 70 insurance executives from all over the world participated. The poll was conducted by the audit, tax, and advisory services firm KPMG to find out about global insurers? perceptions of the biggest risks they face, their current capabilities, and their recent transformation initiatives. Of the respondents, 19% are from Asia Pacific, 33% are from the Americas, and about half, 48% are from Europe.

Empowered for the Future?

The KPMG report, with the title, Empowered for the Future: Insurance Reinvented, insurers are struggling to adapt their organizations for the future, although they do know that they urgently need to transform existing practices to be ready for it. A statement by KPMG says that insurers are not placing enough attention on the changing needs and preferences of their clientele and are mostly focused on implications of regulatory policy. The statement also added that less than a fourth of those polled expect that their current operations can be disrupted by changes in customer behavior.

The report?s lead author and KPMG?s global lead partner for insurance innovation and change Mary Trussell notes that very little has changed although insurers have been trying to transform their organizations for tens of years. She added that more fundamental changes need to be done in the insurance business and their operations if they are to truly adapt to the future.

Uphill Battle for Sustainability

Although 53% of the insurers that achieving short-term transformation is doable, the same cannot be said for a sustainable transformational outcome.

KPMG International global head of insurance Gary Reader said that it takes a more strategic approach to truly accomplish an organization?s reinvention and that it is far more complicated than most insurers have done with their past initiatives.

Change and Technology

Another interesting data from the report is that insurers are now seriously viewing new technology as a catalyst for change. 47% are recognizing that apps and mobile platforms are creating new opportunities for transformation and are forcing their business to change. 41% said the same about data and analytics and 45% concurred that the same can be said about social collaboration and networking.

The survey noted that a third of the respondents shared that they were watching non-insurance businesses to help them find inspiration to help reinvent their organizations. Reader further notes that insurers are taking approaches and ideas from other sectors to come up with effective strategies themselves, a move that allows insurers to compete with not just other insurers, but also with other businesses for customer?s attention.

Trussel shares that many insurers may still not be seeing the need to set their sights on the ultimate prize, how to be at the top of their game and not just be able to endure the changes the future is asking for them to make.

How stable is your insurance business? What changes do you need to implement to go with the tide? Will you sail to success or sink to the abyss of adaptation failure? We may be able to help. Contact us today for a consultation!

 

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