General Insurance Update 2017
Major forces and international trends are shaping the Kiwi insurance industry. The way everyday New Zealanders will buy, manage, and use insurance could become dramatically different.
Emerging technologies like artificial intelligence, robotics and machine learning, the Internet of Things and blockchain, are redefining insurers’ operating models. Other major forces shaping the industry include demographic change, ever-changing customer expectations and preferences, the sharing economy, and other innovation and productivity initiatives.
“Disruption is the new normal” says KPMG’s Steven Graham in KPMG’s General Insurance Update 2017, released today following his presentation at last week’s Insurance Council of New Zealand’s annual industry conference.
The competitive landscape is changing, and traditional insurance models and products are evolving in response. Innovation should be looked at as both a threat and an opportunity in the industry. So how fast can existing players react and change their own business models? Richard Harding, CEO of Tower Insurance commented that “as the challenger in the market, we believe disruption provides us with a significant opportunity, our size provides us with the ability to move faster and be more nimble than the larger industry incumbents”.
The potential for a non-traditional provider, such as one of the technology giants, Amazon or Apple, to step into the market adds to a clear imperative for the industry to continually challenge itself and evolve.
So what could this mean?
For a start, imagine seamless customised solutions during key life events; insurance along with banking and legal advice as well as relevant services — for example, when buying a house or a vehicle, or getting married or divorced. The new reality will be tailored insurance effortlessly delivered, and responsive to your changing situation.
CEO of Suncorp New Zealand, Paul Smeaton, says, “We want to become more of a market place to meet Kiwis’ needs – supporting them in the key moments that matter in their lives.”
Imagine car insurance on demand if you are going away for just a few days. Your cover might also take care of any roadside assistance or accommodation needs. You’ll be able to turn your cover on and off using your phone or tablet.
And insurers can provide access to more services that fit at that right moment.
Craig Olsen, CEO of IAG New Zealand, agrees. “It’s our responsibility to be leading change — transforming our business and delivering amazing customer experiences."
In another paper in this year’s insurance update, KPMG’s Jamie Munro says this type of thinking and the kiwi ‘can-do’ attitude shines through. In the latest KPMG Global CEO Outlook Survey of nearly 1300 CEOs, ninety percent of New Zealand CEOs see disruption as more of an opportunity than a threat — compared to only 65 percent of CEOs outside New Zealand. Eighty-eight percent also see themselves as actively disrupting rather than waiting for things to happen — ten percent more than the global average.
New Zealand CEOs were all in agreement that being completely customer centric was the key. But to make the most of new opportunities the sector needs better quality customer data. Every customer is different, and gaps in market intelligence can hinder the depth of insight that insurers can use, says Munro.
“Great technology can drive innovation and unleash creativity. But without quality data, CEOs and their teams are not working with a full deck of cards. They won’t be able to make the right decisions for their customers.
”Internationally, insurance sector leaders highlighted their people as being critical to their future success and something they worry about. This theme resonated with all the local CEOs we spoke with. Craig Olsen of IAG underlining that “talent is paramount, not only in the current environment but also in looking ahead to the workforce of the future and creating the work environment that retains and attracts talent.”
Other papers in the update draw together specialist insights into augmented and virtual reality, digital labour, the new Insurance Contracts accounting standard, cybersecurity, and digital disruption.
For more information contact:
Partner, Head of Insurance
KPMG New Zealand
P: +64 9 367 5829
M: +64 21 771 301
Director, Head of Digital Futures
KPMG New Zealand
P: +64 4 816 4638
M: +64 22 657 7368
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