September 5, 2018 by Staff
Nearly all (95%) U.S. insurance CEOs are confident about their growth prospects over the next three years, with new technologies and M&A seen as critical for sustainable growth. CEOs also indicate technology will help them improve the customer experience and provide on-demand products and services, according to the 2018 KPMG CEO Outlook survey.
“CEOs are confident in the economy and therefore bullish about their prospects for growth, focusing on core businesses and key markets,” says Ed Chanda, insurance sector leader, KPMG LLP. “However, real growth will come as insurers take advantage of new technology, M&A and alliances to transform the way they do business and enhance the customer experience.”
M&A to drive growth
Almost half (43%) of U.S. insurance CEOs indicated that there is a large appetite for M&A and strategic alliances to drive sustainable growth; 47% say M&A would help reduce costs through synergies and economies of scale, as well as increase market share.
“With the emergence of more agile, technology-enabled competitors in the industry, insurance leaders recognize that now is the time to innovate and transform their business and operating models via strategy-aligned M&A, partnerships and alliances,” says Ram Menon, global lead partner, Insurance Deal Advisory, KPMG LLP. “The goal is to rapidly gain access to innovative capabilities and technologies to effectively and efficiently engage their customers and achieve sustainable competitive advantages.”
Delivering on transformation
As U.S. insurance CEOs focus on growth, 95% of them see technological disruption as an opportunity rather than a threat, and 85% say they’re prepared to lead their organizations through radical transformation.
“Automating processes and using data and analytics to understand customer needs and build personalized products and services is not enough,” adds Chanda. “Insurers need to ensure that the right technologies are implemented across the entire organization in order to derive the agility and efficiencies that make customized services possible.”
In order to transform into connected enterprises and personalize the customer experience, insurers need to collect and maintain a large amount of information from their clients. In fact, 93% of U.S. insurance CEOs say that protecting their customers’ data is one of their most important responsibilities as CEOs. Further, 73% believe they’re well prepared to face a cyberattack.
The Rise of the digital workforce
While U.S. insurance CEOs see technology skills as critical to supporting their organizations’ growth plans, 63% expect artificial intelligence to create more jobs than it eliminates.
“As robotics and automation become more prevalent, humans can shift from gathering information and preparing analyses to evaluating outcomes, solving problems and identifying opportunities,” says Chanda. “As companies engage in this transformation journey, they need to prepare their current employees for the transition with clear communication and training.”
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This story was originally published by Canadian Insurance Top Broker.