Demands by Customers Driving the Life & Annuity Agenda – KPMG
Article Synopsis :
Advancing technology and rising customer expectations are driving urgency in insurance carrier boardrooms and management suites.
In “Keeping Up With the Pace of Change – Demands by Customers Are Driving the Life and Annuity Agenda”, KPMG makes the case for linking innovation with long-term business strategy to succeed in the rapidly changing Life and Annuity marketplace.
Though the insurance industry seems to be in the throes of change, the pace of transformation is surprisingly slow. Per KPMG’s research, only 22% of surveyed insurers have started transformational projects, and less than one in three have completed at least one project. This leaves half of the surveyed population in the ‘doing nothing’ or ‘assessing’ stages. These numbers are as surprising as they are confounding.
KPMG sees the following actions as strategic opportunities to reach customers – particularly in underserved market segments:
- Open engaging, digital-based distribution pathways
- Address inefficient underwriting processes with powerful, digitized analytical tools
- Recruit new blood into the agent/broker workforce (facing a wave of retirement in the coming five years)
- Attack rigid, duplicative, and aged technology platforms through coordinated upgrade campaigns
- Attract tech-savvy talent to upgrade internal information technology systems and build better customer-facing pathways for communication and distribution
- Leverage powerful insights springing from fountains of structured and unstructured data
This is a comprehensive report with compelling data and well-articulated points-of-view in the following areas:
- Linking Strategy to Digitization and Transformation
- Customer Connectivity
- Big Data, Analytics, and Predictive Modeling
- Opportunities in Annuities
- Cyber Security
- Venture Capital
As there’s nothing more important in the digital age than customer-centricity, the paper articulates four attributes to guide strategy toward a more customer-centric organisation:
Customer Insight: Identifying and understanding customer needs
Customer Strategy & Proposition: Translating identified needs into transparent products and experiences
Service Excellence: Operationalising and delivering top-notch customer experience
Channel Optimisation: Matching the right customers to the right channels
What triggers transformation initiatives? KPMG’s research reveals three top drivers across all industries (including insurance):
- 33% Meeting customer demand (changes in customer focus, buying patterns/preferences)
- 30% Coping with changes in technology
- 29% Responding to domestic competitors
A major challenge is managing the broad scope and complexity of transformation. The challenge is made even more difficult by the introduction of new regulations, which add complexity and often cost to the overall exercise. Nevertheless, the only option the authors see is to move forward with all dispatch. A ‘wait and see’ attitude actually invites more risk than does prudent, aggressive action.
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Digital Insurer's CommentsThere is a radical transformation happening with Customer Experience across digital channels, gradually impacting physical channels, where most Big Insurers write the majority of their business.
Digital customers want targeted, on-demand, real-time products and services delivered seamlessly across all devices. As devices – and not people, i.e., human agents – transact more business, carriers equipped for yesterday’s market will deliver also-ran results.
Insurers thrive urging customers to take action to mitigate risk. Yet when faced with serious operational risks from digitization, according to this report, over half of insurers do nothing. Physician heal thyself.
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