Opportunity Through Innovation – KPMG Whitepaper
Article Synopsis :
Though focused on New Zealand, this KPMG whitepaper, ‘Opportunity Through Innovation, a General Insurance Update,’ is a culmination of thought pieces from KPMG’s Global Insurance Leadership team.
The theme here, as the title suggests, is innovation. To the question, What are your organization’s three greatest internal innovation challenges? 79% of respondents say they ‘are running to keep up with what we already do.’ 74% say they ‘lack internal core skills to keep up with innovation,’ and 71% cite ‘lack of investment and cost pressures.’ These results track with a general lack of innovation in the insurance industry, in digital technologies particularly.
Key ‘points-of-innovation’ found in the report include:
- Innovation beyond digital, with an emphasis on customer-centric and technology-led business models
- Building agile business models capable of faster decision-making, reduced operational costs and customized product offerings
- Matching an acute awareness about innovation with positive response
- Accelerating the rate of technology adoption of online platforms, new technologies and new emerging digital business models
- What’s being discussed in your War Room?
- Putting the customer first; the competitive advantage
- A positive approach to managing cyber risk
Based on the discussion and findings, KPMG posits 10 key catalysts of innovation management can use to thrive in a changing world:
- Apply agile and dedicated leadership: Innovation must be on the leadership agenda.
- Encourage change through cultural transformation: Breaking down internal silos is a key success factor.
- Cultivate high performing human talent: Boldly create a workforce reflecting the culture you hope to achieve.
- Understand why you are investing: Winning organizations budget for innovation and own it as a business.
- Decide on strategies to help the organization thrive as the industry transforms: Update competitive strategies and realign models.
- Learn from others: Consider new partners to accelerate results.
- Develop your own view of when and how advances in technology will impact your organization: Don’t follow the crowd. Your situation is unique.
- Leverage new technologies: Invite the future into existing operations first.
- Mitigate risk by investing in experimentation: Don’t be afraid to experiment. The greater risk lies in doing nothing.
- Be willing to disrupt existing business models: Attack yourself before others do.
The paper sheds light on NZ-specific issues like CAT risk, EQC (earthquake) reform, and the imposition of GST (service tax) on offshore service providers. It also looks at AA Insurance, AMI and STATE who have started disrupting the NZ industry with digital offerings.
More generally, the paper discusses the risk that digital transformation brings and how the industry can tackle it with improved governance and collaboration and the right strategies and architectures.
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Digital Insurer's CommentsConsumer expectations have never been higher. Across all sectors, retail and commercial buyers see digital technology as a means for more personalized service, not to mention a broader array of opinions and options.
The imperative is to deliver better and faster decision making, and products tailored and priced for individuals and commercial buyers. Insurance consumers expect more from insurance carriers because they receive more—defined as better digital experiences—from companies in other industries. And the bar inches higher every day.
Insurance is a fiercely competitive business. Increasingly, in a digital world, new battle lines are being drawn by outsiders.
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