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P&C insurance industry no longer sees tech as threat, but as opportunity: KPMG
Gloria Cilliers on December 8, 2016
One of the key differences to emerge from KPGM’s latest insurance survey, compared to previous years, is that technology is “no longer seen {by the P&C industry] as a threat, but rather, as an opportunity”.
Mary Trussel, KPGM’s global insurance change lead partner, told Canadian Insurance Top Broker that survey respondents are seeing technology as the lever to streamline operational process, enhance customer service and take cost out of their business.
This likely supports the shift from a process-centric view to a more technology driven, data-centric and operationally efficient view. What was “out of the box” technology last year, is more commonplace today.
The fourth annual Opportunities and Risk survey was released during KPMG’s 25th Annual Insurance Conference, held at the Metro Toronto Convention Centre on Tuesday. Forty percent of survey respondents were from the P&C insurance industry, while 39% were life insurers providers, 4% intermediaries and 17% of other sectors, including areas like consulting and regulatory.
The other big difference from previous years is “a greater focus on strengthening customer loyalty,” Trussel said. In the face of all the challenges affecting the industry today, Trussel said the industry “should focus a lot more on easing the claims process in order to help retain customers.”
Five key megatrends emerged from this year’s survey:
• Enhancing operational processes and technology is the major opportunity
• Cyber security is an industry risk
• The customer is still king
• Low interest rates are here to stay
• The general mood is pessimistic
“Cyber risk and security is now absolutely front of mind. Three years ago, it was nowhere. Now, it’s a real issue for boards” Trussel said. “For the P&C sector, there’s the opportunity to develop new products to help protect customers. The industry certainly recognizes the opportunity, but a lot of them are rightly cautious, as it’s a dynamic risk that’s not well understood. Customers need support at their point of need, so we see insurers providing packaged solutions by partnering with organizations like KPMG, to help companies build robust defenses and to help them manage the risk.”
Customer-centricity is a key priority, which was most evident in a year of significant cat losses, she added.
Two key risks were increasing in pressure, Trussel said, including regulatory & compliance, and costs that are increasing operational risk. “Automation is the answer to both these risks.”
The survey also gauges the overall mood of the insurance industry, Trussel said, and the “general outlook is more pessimistic than it was a year ago.” “Insurers are unusually pessimistic about the outlook of their own organizations, compared to their outlook of the sector. It’s reflective of the challenges that the industry’s facing today, and its ability to adapt to these changes.”
P&C insurance industry no longer sees tech as threat, but as opportunity: KPMG
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