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."
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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