Article Synopsis :
Switzerland’s non-life insurance industry is being impacted by a range of new regulatory initiatives as well as changes in technology and customer behavior. Traditional business and operating models are under threat.
KPMG’s latest publication, “Clarity on Non-Life Insurance – Evolution or revolution for Swiss insurers?” addresses the more fundamental shifts and presents discussion and analysis of what they mean to the industry. The report is organized in three parts:
- CEO insights: Senior insurance executives share their views on the future of the industry
- Industry transformation: Digitalization, regulation and customer needs cause transformation to gather pace. What can be done in response?
- Drivers of change: What impacts will Swiss tax reform, ORSA and international oversight have?
Carriers, the report tells us, are responding with new business models, omni-channel operations and up-to-date infrastructures capable of supporting digital transformation. Changing regulatory landscapes are driving new organizational strategies and business-related decision making processes.
The market faces digital disruption from non-traditional competitors, such as fintechs and start-ups who are always innovating around better customer experiences. Insurers should re-imagine their existing value-chain in the context of digital, asking: Where can digital benefit us? Three suggested areas are:
- Back-end: Power existing systems with IoT using analytics to derive insights.
- Operations: Automate, deploy algorithms etc. to reduce costs.
- Front-end: Deploy more consumer touch-points to drive business.
With respect to implementation KPMG recommends the following framework for digital transformation designed to help organizations “Start small, think big and move fast”:
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Digital Insurer's CommentsInsurers can no longer simply keep track of what peers are doing in digital transformation because it’s companies in other industries that are in fact shaping customer expectations and setting new benchmarks for insurers.
Digital transformation on any scale requires two things to succeed: Adequate investment and a C-level sponsor. To secure both we recommend taking these steps:
- Begin by understanding your (true) digital readiness.
- Identify a number of impactful use cases relative to high-level digital ambitions.
- Sketch out a digital roadmap with which to build internal consensus and manage stakeholder expectations.
- Look for C-level support and subsequent funding to find you as you work through steps 1-3.
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