Following the Canterbury earthquakes and a regulatory overhaul of the insurance sector, a period of innovation and disruption has introduced new levels of competition in the Kiwi insurance market, reports KPMG.
KPMG’s General Insurance Update 2015, released today, says that innovation and customer focus is critical to the success of established insurance companies – who are increasingly coming under threat from new competitors and product offerings.
KPMG Financial Services Partner, Jamie Munro, says while customers depend on their insurers, “they are also demanding cheaper premiums and more personalised products”.
Research by KPMG International earlier this year, which surveyed 280 insurance executives from 20 countries, showed industry leaders are acutely aware of the need to innovate. In fact, 83% of respondents agreed that the future success of their business was tied to their ability to innovate. Almost half (48%) said their own business models were already being disrupted by more nimble competitors, and they expected further disruption over the next five years.
Jamie Munro says this experience is reflected in New Zealand – where retailers and new entrants, such as Youi, are providing more choice to customers.
“It is too soon to properly assess the impact of this disruption…but in its first year, Youi has written just $19 million in premium revenue, by positioning itself as being more customer-centric.”
A number of iconic New Zealand retailers have also joined the market, partnering with established insurers:
According to Kay Baldock, KPMG’s Head of Insurance: “Insurers such as AA Insurance, AMI and STATE have enhanced their digital offerings – providing quotes and accepting initial claims notifications online, and allowing customers access anywhere, anytime.”
“This is all about providing more choice and tailored products to everyday customers,” says Jamie Munro.
Established Kiwi insurers are also investing in technology; and using data and analytics to help drive greater innovation and growth, improve product offerings and service capability.
KPMG’s General Insurance Update highlights 10 key catalysts of innovation that any organisation can use to remain competitive in a changing world.
“Disruption is not the sole domain of small companies or start-ups,” says Jamie Munro.
“It can come from within any organisation, as long as they’re prepared to take bold steps forward.”
Download the General Insurance Update 2015.
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