“There has been a clear shift in mindset over the past few years. Insurance providers increasingly recognize that they need to be customer-centric rather than product-centric,” says Mary Trussell, Global Insurance Innovation Lead Partner, KPMG International. “They are realizing that customers do not come to them for a specific product, they come to them to help manage the risks they face. But you cannot respond to that shift with a product-centric structure.”
According to the KPMG report, “A New World of Opportunity,” most insurance executives agree. In fact, more than eight in 10 respondents to the survey said they believe their organization’s future success to be closely tied to their ability to innovate ahead of competitors – and it is the potent combination of data and digital is also driving increased innovation within the sector.
But that innovation is being hampered by a lack of talent, notes Trussell, as a lack of skills and capability was ranked by 74% of respondents as a top three barrier to innovation, particularly for smaller and mid-sized organizations and those based in Europe.
“Simply put, insurers know what they need to do in order to drive innovation,” says Trussell, “but recognize they lack the skills to achieve it.”
In response, insurers seem to have tried a wide variety of strategies and initiatives to help improve innovation across the enterprise. Many have focused on upskilling or training their organizations to be more innovative; 51% said they have taken on cultural change programs to foster innovation while 36% say they have introduced training programs focused on idea generation and innovation skills.
With so much change already underway across the sector – not just from innovation, but also from new regulations, new customer demands and new expectations – few insurers seem to have the time or bandwidth to take on new projects, says Trussell.
“In fact, 79% of respondents across the globe told us that they were already running at full tilt just keeping up with their core requirements,” she says.
Innovation in the insurance industry is happening, but there is a missing ingredient that many industry execs have identified as limiting progress.