Morning Briefing: Insurers struggling to innovate says KPMG

Morning Briefing: Insurers struggling to innovate says KPMG

Morning Briefing: Insurers struggling to innovate says KPMG Insurers struggling to innovate says KPMG
A survey from KPMG reveals that many insurance companies are struggling to innovate, leaving them at the mercy of nimbler disruptors. The study, titled “A new world of opportunity: The insurance innovation imperative”, found that rapid innovation has created significant challenges for insurers with 48 per cent saying that their organizations are already experiencing disruption from new, more nimble competitors. Those in North America were significantly more likely to say they had experienced disruption than their European peers and somewhat more likely to do so than their Asian peers.

Four-in-ten respondents said that increased competition from their existing competitors would also create significant challenges over the next 2 years. But while the report shows that insurers recognize the challenge most are struggling to catalyze innovation within their own organizations. More than three-quarters (79 per cent) say that they are already running just to keep up with their day-to-day requirements. Slightly fewer (74 per cent) say they lack the internal core skills needed to drive innovation.
 
Reinsurers urge climate change action
The insurance industry is becoming increasingly concerned about the lack of action by politicians to tackle climate change. With billions of dollars of insured assets at risk from more frequent weather-related incidents, the industry has reacted to a warning from the UN’s climate chief that the targets being set by global governments will not be enough. At a conference this week the chief executive of Swiss Re, Michael Lies, told reporters: "Definitely we expect political courage to move in a direction that shows responsibility towards future generations and a certain interest in defending the sustainability of this planet.” Reuters reports that Peter Hoeppe, Munich Re’s head of geo risks research called for more focus on defences against floods in order to reduce the growth in insurance premiums in the medium to long term.
 
Sharp drop in Americans without health insurance
Newly released data from the US Census shows that the number of Americans without health insurance fell sharply last year. The uninsured level fell to 10.4 per cent in 2014 from 13.3 per cent in 2013. There were 33 million people lacking insurance or receiving Medicaid last year, down 8.8 million from 2013; that’s the biggest drop in a year since records began in 1987. The Wall Street Journal says that a separate study shows that the pace of the decline continued in the first half of 2015.
 
Another UK insurer views acquisition as M&A continues to grow
Mergers and acquisitions are continue to gather pace in the global insurance industry. In the UK another two insurers are weighing a potential merger. Phoenix Group has confirmed that it is in talks with Guardian Financial Services on a non-exclusive basis. Guardian is currently owned by private equity group Cinven. Sky News reports that the deal would create a company managing $108 billion of assets including $2.6 billion of pension annuities which Phoenix sold to Guardian last year to reduce debts.