The results of the survey support KPMG's commentary on the priorities insurance companies should follow in innovation if they're planning long-term success
Some 85% of global insurance CEOs want their employees to pursue innovation without worrying about the negative consequences if an initiative fails, according to a new KPMG report.
The survey results released today also found 59% believe they already have a culture in place that encourages this, and 69% see third parties as essential to creating agile working practices – methods that adopt a fail fast and fix approach.
The study by KPMG China comes as many within the industry, including the Big Four consultancies, are encouraging incumbent insurers to become more agile and form partnerships that drive forward innovation.
KPMG China partner and co-head of insurance Erik Bleekrode 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.”
According to KPMG China, there is a strong customer focus among Asian-based insurers that’s likely the result of Generation Y – the cohort born between 1981 and 2000 generally known as millenials – being the largest population segment.
It said the situation is fuelled by the fact that regulations are enabling more digital services and other sectors are pushing customer expectations higher.
The findings from KPMG are based on a survey of 132 insurance CEOs from 11 countries in the US, Europe and Asia.
KPMG China says insurance companies in ‘tremendous position’ for innovation
Despite its survey showing almost 40% of CEOs don’t believe they have a culture in place to become more agile, KPMG China believes incumbents are in a strong position for innovation.
KPMG China partner and co-head of insurance Walkman Lee said: “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.”
As a wider organisation, KPMG has been touting the benefits of innovation through partnership and becoming part of an insurance ecosystem in recent reports.
In one paper focused on the Canadian insurance market, KPMG Canada highlighted new business models, the use of data to better understand millennials and collaborating with start-ups will be the key to maintaining market success in the future.