Ninety-seven percent of insurance CEOs are confident about their company's growth over the next three years, while 73 percent think disrupting their organisations and the marketplace is top of mind, according to 132 insurance CEOs from 11 countries in the US, Europe and Asia surveyed by KPMG.
Insurers' comfort with their organisation's resilience can be linked back to their recent efforts to ramp up transformation initiatives in their organizations to drive strategic growth or cost objectives. Eighty-five percent of these leaders are also confident about the growth of the insurance industry, and 65 percent are confident about the global economy.
Facing emerging challenges related to climate change, new technologies and geopolitics, insurers are focusing on innovation and cyber controls and making the most effective technology and workforce investments. Almost half of CEOs (47 percent) say they plan to upskill more than half of their entire workforce, particularly in digital capabilities like advanced data visualization and coding, within the next three years.
Much of the focus of organisational disruption deemed needed is around customer centricity, with 64 percent of CEOs saying they believe that they need to significantly improve their understanding of customers.
Erik Bleekrode, Partner, Co-Head of Insurance, KPMG China, said: "With customer needs and expectations and the competitive landscape rapidly evolving, insurers understand that their legacy operating models will no longer be fit for purpose. Given the rising appetite for insurance products among Asia's growing and tech-savvy millennials, particularly in China, insurance companies are increasingly looking to use technology to create new products and drive customer affinity."
The trend of improving customer experience is evident in Asia, where there is a strong customer focus among Asian-based insurers. It is the result of the fact that tech-savvy Millennials are the largest population segment, regulations are enabling more digital services, and other sectors are pushing customer expectations higher.
Lee-Han Tjioe, Partner, Digital Insurance, KPMG China, said: "We see that new entrants, micro-insurers and traditional carriers are integrating more into the digital ecosystem. Insurers are partnering with giant digital retailers to protect parcel deliveries and product warranties, and life insurers are also embracing the trend by leveraging customer data for more effective sales interactions in response to customers' life events."
Most insurance CEOs see importance in building a culture which encourages its workforce to be more innovative, with 85 percent of insurance CEOs saying they want their employees to pursue innovation without worrying about the negative consequences if an initiative fails, yet only 59 percent believe they already have such a culture in place. Sixty-seven percent of insurance CEOs believe that a culture of agility can only be achieved through third-party partnerships.
Walkman Lee, Partner, Co-Head of Insurance, KPMG China, commented: "Traditional insurers are actually in a tremendous position to succeed in innovation, given their capabilities in risk management and large customer bases upon which they can test best practices, new services and channels. Insurers must adopt agile operating models, complementary technology and data capabilities, to become more responsive, faster at introducing products, and better at building effective partnerships and the required digital workforce."