Research from KPMG suggests that insurers must transform their organisations amidst increasing competitive pressures and disruptive technologies and business models.
For its report, Empowered for the future: Insurance reinvented, KPMG surveyed more than 70 insurance executives from the largest organisations around the world about their recent transformation initiatives, their existing capabilities and their biggest risks and barriers.
"What is clear is that insurers understand the urgent need to reinvent themselves," the report said.
"Success in the insurance industry of the future will not come from simply tweaking the status quo; insurers will need to change virtually every part of their business if they hope to not just survive, but thrive."
Responding to the report, KPMG insurance partner Scott Guse told Risk Adviser that advisers should note that while the insurance industry is ripe for change, "it will be incremental change rather than transformational".
It is paramount, he added, for advisers to make sure clients have the right amount of coverage and the right sort of protection when it comes to cyber risk since this is an area in which the insurance industry really struggles.
"They don't have the knowledge internally to work out how good a corporation's cyber practices are," he said.
"They've got very little benchmarking information, and the policy wordings are very obscure as to what they include and exclude, and how far they go."
Advisers should be cautious about where insurance companies source their data from, Mr Guse added.
"Insurance companies will be using more and more data from all over the place," he said.
"Some of that data will be inaccurate, unreliable, so be careful what they pull out and present to you."
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 25 Sep 2018ASIC finds serious delays in breach reporting from major banksBy Eliot Hastie
- 25 Sep 2018Failed advice firm was ‘a proven success story’: DalyBy Adrian Flores and James Mitchell
- 25 Sep 2018New city added to FPA’s Women in Wealth programBy Adrian Flores
- 25 Sep 2018Fund managers charging fees for underperformanceBy Eliot Hastie
- 25 Sep 2018Government minister to address AFA conferenceBy Adrian Flores
- 24 Sep 2018Accountants continue battle for advice spaceBy Adrian Flores
- view all