Insurance executives are struggling to find the innovation that will give them growth and sustenance, according to a report by KPMG.
The auditing firm surveyed 280 insurance executives around the world in a report titled “A new world of opportunity: The insurance innovation imperative”, found that 83 per cent of respondents said that their organisation’s future success is tied to its ability to be innovative.
“Innovation is key to growth, and at times insurers need to reinvent themselves to merely defend their turf,” said Gerdus Dixon, KPMG’s insurance sector leader in South Africa.
He adds: “We see that South African insurance customers, shareholders and employees demand innovation. The lines between banking, insurance and asset management have become blurred and insurers now have to compete on a wider stage.”
Nearly 50 per cent of the respondents to the survey said their organisations are affected by new competitors. In the same breath the report reveals that the threat is no longer just from new start-ups, four-in-ten respondents believe their existing competitors would become a challenge over the next two years.
In the next two years, the impact of regulation is seen to be the greatest hindrance of creativity. They feel that overly stringent requirements are making it even harder to be innovative.
About 80 per cent are struggling to meet their daily requirements with a slightly lower 74 per cent admitting “they lack the internal core skills needed to drive innovation”.
“Insurers and intermediaries are increasingly finding that there is no ‘silver bullet’ to creating a more innovative organisation; no ‘off the shelf’ package that drives new ideas,” said Dixon.
Two-thirds of the sample said they look to other industries and sectors for inspiration and innovation models.
“We have seen South African insurers respond to the challenge differently with some looking inwards while others have started innovation incubators, enticing external parties to contribute ideas,” said Dixon.