Of all the organizations that hold personal data, insurers are right up there in terms of volume and richness. From employment and medical details to personal possessions, houses and cars to holidays, they have the information to build a vivid, single picture of their customers.
This presents a significant opportunity to target highly personalized offerings and deliver an outstanding customer experience through various touch points and channels. In today's digital world, it also makes insurers vulnerable to cyber-attacks from criminals intent on identify theft or ransom.
Compared to banks, insurance companies are at an earlier stage in their digital transformation, reflecting the relatively conservative nature of a sector where, historically, human relationships form the core of customer interactions. It's fair to say that, despite the onslaught of disruptive aggregators and new online providers, many insurers are still working with traditional business models and legacy technology infrastructure.
Banks, on the other hand, have typically made significant investments in digital, with slick processes, clever apps and fast, streamlined transactions. They also have very large security functions with significant budgets. As insurers play catch-up, they must place a high priority on cyber security to protect their wide surface of potential attacks. But, equally importantly, they should view cyber security as a source of competitive advantage.
KPMG's* Consumer Loss Barometer, which surveys security executives' perceptions of digital trust, shows banking ahead of insurance in key measures of cyber agility and competitiveness - like agility, resilience and speed to market.
|Cyber agility and competitiveness
|Achieving a competitive advantage||33%||27%|
|Demonstrating cyber agility and resiliency||40%||31%|
|Enabling speed to market||41%||35%|
These findings reflect the fact that insurers are still laying the building blocks of cyber security, placing appropriate patches, understanding risks in the supply chain, and putting basic controls in place. While much of the development is of a defensive nature, there is an opportunity here for insurers to truly blaze a trail in developing a strong foundation.
I believe the time is now ripe to go much further and implement innovative technology solutions, where security becomes an integral part of the new, digital customer experience. Consumers are aware they're placing a lot of personal information in the hands of insurers. A cyber-led trust partnership not only re-assures them that this data is safe and secure; it gives them a slicker, friendlier and more intuitive relationship. In this way, consumers may be comfortable with sharing even more data - creating a virtuous cycle wherein the product can become further tailored.
For the insurance company, data insights will power a personalized sales and retention strategy, with relevant cross-selling and value-added services. And, should a breach occur, they are in a position to act swiftly and decisively, with established protocols carried out within a customer-first culture.
Insurers have a proud tradition of trusted, long-term relationships with customers. By translating this to the digital world, they can remain relevant and thrive in the face of disruption.
*Throughout this blog, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.