13 June 2016 Insurance

Transformation efforts of insurers less than ideal: KPMG

Only half of insurers believe they are capable of extracting and sustaining value from business transformation initiatives, according to a report released by KPMG International, a global network of professional firms providing audit, tax and advisory services.

The report, “Empowered for the future: Insurance reinvented”, surveyed more than 70 insurance executives from the around. It found that 57 percent of those polled admitted that their transformation efforts to date had been less than ideal.

The report was released during the International Insurance Society's Global Insurance Forum 2016 in Singapore (12-15 June), where industry leaders and executives gathered to discuss innovation and industry transformation.

"Insurers have been trying to 'transform' their organizations for decades– yet very little has actually changed," said Mary Trussell, KPMG global lead partner for insurance innovation and change and lead author of the report. "If insurers are to truly 'reinvent' their business and position themselves for success in a world of disruptive innovation – they will need to make more fundamental changes to their business and operating models than ever before."

KPMG suggested insurance executives understand the need for transformation but found they are more focussed on implication of regulatory policy and may not be placing enough attention on changes in customer preferences and needs. Less than a quarter of respondents expect their operating model to be disrupted by changes in customer behaviour.

Trussell added: "We'd suggest that customers should be the inspiration for insurers' efforts to reinvent themselves. In a highly regulated sector, treating changes in regulation as a springboard to enhance the business for customers rather than something to be endured distinguishes players at the top of their game. The data suggests that many insurers may not yet have their eyes on the ultimate prize."

53 percent of insurers polled said they were capable of achieving short-term transformation wins, but there is a big difference in achieving a sustainable transformational outcome, according to KPMG.

Gary Reader, global head of insurance at KPMG International, commented: "When it comes to enterprise-wide strategic change – the type that truly leads to companies being reinvented – it takes a much broader view and a much more strategic approach than most insurers have needed for past initiatives."

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk