The majority (96%) of global insurance CEOs who participated in the 2021 KPMG CEO Outlook survey indicated that the pandemic has accelerated the progress in the digitization of operations and the creation of a next-generation operating model. Fifty percent also indicated a sharp acceleration in the progress in the creation of a seamless customer experience, while 86% said that they use their corporate purpose to help drive action in addressing the needs of stakeholders.
Insurance CEOs address numerous critical issues currently affecting the insurance industry, including digital acceleration, customer experience, ESG, corporate purpose, growth, risks and the new normal. Below are the results of their responses:
Digital acceleration and the customer experience
— 68% said they will focus on customer-centric technologies such as chat bots
— 60% in data security measures
— 56% in digital communications such as video conferencing and messaging platforms
“Insurers realized that they need to modernize their systems if they’re going to survive,” said Ed Chanda, National Sector Lead, Insurance, KPMG LLP. “There is a need to improve the assessment of risk while meeting customer needs and expectations. In order to do that, insurers need to digitize their operations, receive and process information in a timely manner and deliver products in a cost-effective way.”
“Growth in insurance will come by serving smaller businesses,” added Chanda. “To do that, digitized platforms are needed to cost effectively collect and process data that underwriters can use to understand their needs and rapidly assess risk and price products.”
Environmental, Social, and Governance (ESG)
“ESG is very important to insurers as it not only affects their customers and employees, but also how they design products and manage their portfolios ,” said Chanda. “Many new insurance products are greener and take into account social responsibility.”
Growth prospects and risks
— 32% said that tax risk was the number one risk, followed by,
— Regulatory risk at 22%, and
— Interest rate risk at 20%.
“Insurers have been bullish for a few years about the growth prospects of their companies and the industry,” added Chanda. “They see 2020 as a pause to the trend followed by years of expansion. We expect growth in commercial lines and expanded offerings in the group and voluntary benefits space.”
“The tax landscape is changing rapidly as different countries consider – and in some cases have already enacted – reforms to protect their tax base. The need for reconciliation on an international level is becoming increasingly important,” said Chanda.
Insurance CEO response to pandemic
— 66% said they increased employee communication
— 44% said they increased visibility of leaders with employees
— 44% said they increased flexibility of work hours
The New normal
— 60% pointed to an adoption rate in key markets – 50% plus of the population vaccinated.
— 60% said government in key markets encouraging business to return to “normal” – such as COVID-19 restrictions are lifted.
“The insurance business has changed forever because of the pandemic as we went through a year of doing things differently,” said Chanda. “Insurance will continue to evolve, but investment in modernizing processes and taking advantage of the opportunities technology provides is necessary for the industry to grow, and build products and services customers need and want.”
About the 2021 KPMG CEO Outlook survey
The 2021 KPMG CEO Outlook survey features insights from 500 CEOs at large global companies, of which 50 CEOs are from large global insurance organizations.
To learn more about the results for insurance from the 2021 KPMG CEO Outlook survey or to arrange an interview with National Sector Lead, Insurance Ed Chanda, please contact Andreas Marathovouniotis.
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