Insurance CEOs Want Innovation Prioritized
November 21, 2016 2:51 PM
Nine out of 10 insurance CEOs place innovation in their top three personal agenda items. Thats according to KPMGs survey of 41 such executives for its 2016 insurance CEO outlook, Embrace Change in Changing Times. One-third of those said innovation was at the top of their list.
However, only 37% of those surveyed believe their companies are in an accelerated state of innovation at the moment. Fostering a culture of innovation, formalizing innovation processes, accepting and learning from failure, and developing joint ventures and alliances with strategic partners are all key tactics for insurers to raise their innovation game and position their companies for growth, KPMG writes.
Disruptive technology is the key way insurers will demonstrate their commitment to innovation. Most CEOs said they want to, or currently, leverage disruptive technologies to improve customer relationships (71%) increase sales (73%) or enhance product and service offerings (66%).
At the same time, however, the increased digitalization of the insurance industry is driving fears around cybersecurity. Half of CEO respondents identified cybersecurity risk as their greatest risk-related concern. Only a quarter of respondents said they were fully prepared for a cyber event. The majority said they were only somewhat prepared.
Regulatory risk was the second-most common risk factor identified by respondents. And when it comes to growth concerns, the overwhelming majority 93% -- said they feared that regulations will inhibit our growth. To improve their odds of meeting growth targets, insurers are targeting two primary areas: talent acquisition and M&A.
On the talent side, future insurers are likely to need skills, resources, knowledge, and capabilities in areas where they have not traditionally focused, especially in high-tech areas such as digital and mobile, data and analytics and the Internet of Things, KPMG writes.
And, two-fifths of insurers say they expect to enter partnerships or joint ventures with other firms, and/or buy businesses, assets or capabilities from other companies.