Article Synopsis :
This report from KPMG, based on a survey of more than 100 insurance CEOs, reveals some surprising insights.
The fact that insurance CEOs recognize the need to significantly transform is good news. That they view disruption as opportunity more than threat is also encouraging. But while CEOs have reason to believe they’re making progress, few are taking bold enough steps to be truly disruptive.
Survey highlights include:
Insurers tend to see disruption as an opportunity:
- 81% believe they’re actively disrupting the sector
- 61% see technological disruption as opportunity more than threat
- 85% are confident in their company’s growth prospects this year
Uncertainty is creating concern for the future:
- 76% are spending much more time on scenario planning as a result of an uncertain geopolitical climate
- 36% believe that emerging technologies are their greatest risk
- 52% expect to achieve less than 2% revenue growth over the next three years
CEOs are beginning to realize the value of the customer:
- 73% can confidently articulate their customer value proposition
- 68% say they now take personal responsibility for advocating their customers’ best interests
- 50% say they have aligned middle- and back-office processes to become more customer focused
CEOs are starting to transform the business:
- 58% say they are effective at sensing market signals
- 69% say they plan to invest in digital infrastructure over the next 3 years
- 59% say the primary objective of their investment is to transform their business and operating models
More must be done to bridge the gap between ambition and action:
- 51% are concerned about the integrity of their management data
- 43% are concerned that a lack of quality customer data is hindering the depth of their customer insights
- Only 48% plan to increase investment in innovation over the next 3 years
The top three priorities for insurance CEOs:
- Fostering innovation (25%)
- Becoming more data-driven (25%)
- Implementing disruptive technology (24%)
The survey suggests a growing gap between CEO ambition and reality. Bridging the gap will require insurers to take a fundamentally new approach to investment, innovation and transformation. Five takeaways as insurance CEOs prepare to disrupt and grow:
- Disruption is long-term – Transforming business and operating models is not a short-term undertaking. Patience is required.
- Customers are key – Customer alignment is improving, but CEOs have a long way to go before they can say they have truly differentiated themselves from competitors.
- Risks are changing – CEOs are rightly concerned that their transformation efforts are creating new risks (e.g., cyber). Firms should concentrate on their governance and control environments as well as core capabilities such as program management.
- The future is everything – CEOs will need to understand their strategic positioning for the future and what it means to their innovation strategy. This will require significant foresight and bold decisions, particularly as new business models emerge and evolve within the industry.
- Focus for results – With budgets remaining tight, CEOs will need to focus investments targeting technologies that truly compliment the business model and future direction of their organization.
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