Insurance Risks 2016 – KPMG View
Article Synopsis :
The emergence of self-learning digital technologies, increased regulatory pressure and global economic uncertainty are known risks, but what else looms? With so many risks facing insurers today which ones really matter?
“Insurance Risks 2016” from KPMG’s Risk Consulting group is a snapshot of the relevant risks facing insurers today, classified by the nine industry value drivers, and rated as Emerging, Existing, or Retiring.
Here’s a summary:
|Area of Value Chain||Key contributing factors to Risk|
|Strategy||Competitive pressures resulting from lowered technological barriers; the development of alternative distribution channels; diverse demographic changes.|
|Growth||Market transitioning to real-time delivery of products and services; globalisation of services.|
|People||Talent gap; lack of interested talent pool.|
|Technology||Rise of InsurTechs; cybersecurity.|
|Profitability and Liquidity||Macro-economic events and methodologies.|
|Operational Excellence||Inefficient and faulty internal processes.|
|Health Safety and Environment||Deteriorating environment and accompanying regulation.|
|Compliance||Shifting regulations, standards and trade policies.|
|Reputation and Ethics||Negative assessment of brand in a more open and vocal world.|
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Digital Insurer's CommentsAmong all the value drivers identified in this report by far the longest list of associated risks fall under “Profitability and Liquidity,” with continued low interest rates rightfully at the top of the list, for life insurers especially.
Growth, the cure-all, will, in our view, come not in the form or rising interest rates or hardening markets, but the implementation of new products, services, and distribution platforms. Combined with A.I., robotic process optimization, and analytics to optimize workforce and expenses, digitally-minded insurers can afford to be bullish about an otherwise uncertain future.
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