Based on a survey of 280 insurance executives from around the world and a series of one-on-one interviews with insurance leaders and new entrants from the world of FinTech, the report, entitled A new world of opportunity: The insurance innovation imperative, finds that the need to innovate is already creating significant pressures for the insurance sector. Most survey respondents see innovation as a significant opportunity, with 83% saying that their organization’s future success is closely tied to its ability to innovate.
“Based on experience from KPMG professionals globally, the reality is that insurance customers, shareholders and employees demand innovation,” noted Mary Trussell, KPMG International’s Insurance Innovation and High Growth Markets Global Lead, and author of the report. “Indeed, they expect it, not only from technology providers and device manufacturers, but also from their insurance providers. Insurance organizations can no longer do ‘more of the same’ and expect to grow.”
According to the report, rapid innovation has created significant challenges for insurers with 48 percent saying that their organizations are already experiencing disruption from new, more nimble competitors. Interestingly, respondents from North America were significantly more likely to say they had experienced disruption than their European peers and somewhat more likely to do so than their Asian peers.
Technology isn?t just a source of expanding innovation but a source of potential cyberattack; earlier in September US insurance group Excellus Blue Cross and Blue Shield warned that up to 10 million customer records may have been compromised during the course of a two-year cyberattack on its computer systems, with initial investigations indicating that customer names, dates of birth, Social Security numbers, mailing addresses, telephone numbers, member identification numbers, financial account information and claims information could all potentially have been accessed.
Fintech is full steam ahead in Australia, with Stone&Chalk, the second fintech incubator in Australia, opening in August, with an impressive inaugural lineup of 41 institutions and corporate partners including Allens, American Express, AMP, ANZ, Australian Stock Exchange, Capital Markets CRC, FINSIA, Finzsoft (NZ), HSBC, IAG, IBM, KPMG, Macquarie Group, Optus, Oracle, Suncorp Bank, TAL, Thomson Reuters, Veda, Westpac and Woolworths Financial Services.
It is perhaps reassuring to see several insurers in the corporate lineup.
“Striking your own path for innovation does not mean starting from scratch,” said KPMG?s Mary Trussell. “Instead, it is about leveraging experiences and successes including the ideas of others to create new propositions and approaches to delight customers and create value. It’s about learning from both traditional competitors and new disruptors. And it’s about shamelessly borrowing best practices and new ideas from outside the insurance sector and its traditional allies.”