‘Intelligent Insurers’ Must Deal with Future Mega Trends

June 21, 2012 /

KPMG is embarking on an in-depth consultative project to help insurers around the world as they prepare for the forces and mega-trends which will shape the global insurance industry well into 2020.

From extended life expectancy to rising urbanization, from extreme weather to exploding social media use, from increasing global interconnectivity to eroding trust in institutions, insurers face a dizzying range of opportunities – and threats.

As global insurers continue to deal with the ongoing financial crisis and significant regulatory changes while seeking opportunities for growth, forces are building which will transform the industry over the next decade, according to a report from KPMG International.

KPMG is embarking on an in-depth consultative project to help insurers around the world as they prepare for the forces and mega-trends which will shape the global insurance industry well into 2020. KPMG is presenting an initial discussion paper at the International Insurance Society’s 2012 IIS Seminar, 17-20 June in Rio de Janeiro.

From extended life expectancy to rising urbanization, from extreme weather to exploding social media use, from increasing global interconnectivity to eroding trust in institutions, insurers face a dizzying range of opportunities – and threats.

The report The Intelligent Insurer: Creating value from opportunities in a changing world distills these themes into four overarching mega-trends: the Environment, Demographics, Technology, and Social Values and Ethics. Coupled with an uncertain and ever-changing economic and political landscape, these forces will have a profound impact on insurers and their strategies now and well into the future.

“It’s imperative that insurers study and make the necessary adjustments to effectively prepare for and adapt to these trends in order to compete, meet customer needs, satisfy stakeholders and create value for investors,” said Frank Ellenbürger, Global Head of Insurance, KPMG International. “Addressing these challenges now will shape their prospects for success in the world of tomorrow.”

To help insurers in setting their future strategic course, the discussion paper raises critical questions about what insurers need to consider to meet multiple, unprecedented challenges.

Drawing on the views of some its member firms’ most influential experts and opinion leaders, the discussion paper addresses the four mega-trends and how they impact the four main key components of the insurance business model:
products and markets; distribution and operations; governance and people; and regulation and capital management.

Mary Trussell, Partner, KPMG in the UK and lead author of the paper asserts, “Insurers who want to get out in front of the pack, create competitive advantage and lead the industry are focusing on these issues now. The benefits are clear: streamlined services, cost efficiencies, better customer attraction and retention strategies, engaged employees – creating value for stakeholders.”

Francesca Short, Partner, KPMG in the UK comments “The launch of the Principles of Sustainable Insurance by the IIS are timely – by understanding and developing solutions for sustainable development, the insurance industry creates expanding opportunities for growth. We are already seeing the more forward looking insurers adjusting their investment profiles and risk models.”

“To continue the dialogue, KPMG is leveraging social media channels to gain further insights and opinions on these important topics,” said Ellenbürger. “The outcome will be a shared understanding of how the global insurance industry is rising to the challenge of creating sustainable, long-term value in a turbulent world.”

 

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