Customer, climate change: Issues keeping CEOs awake
Concerns over climate change and staying relevant to customers are some of the pressing issues on insurance bosses’ minds, according to a KPMG survey.
The industry provided more than 10% of responses to the survey, which asked 220 C-level leaders to list the main challenges they must tackle come 2019.
While climate change did not make it to the overall top-10 list, senior industry executives are definitely concerned about the politically divisive issue and the potential impact on their businesses.
“Climate change is number 13 on the CEO list but for insurers, it is certainly much higher than that because they are directly impacted by climate change,” KPMG Insurance Partner Scott Guse told insuranceNEWS.com.au.
“I think the view coming from the CEO survey is that they see a lot of inactivity from the government and that the onus has been placed more back on the individual organisations to make their own choices and decisions about climate change.”
Delivering on what customers expect and want is another task viewed with urgency by the industry.
The challenge ranked fifth on the CEO survey but for the industry, keeping customers happy and satisfied “permeates across a lot of the things that they are doing” such as digital transformation and innovation, Mr Guse says.
“The customer is at the heart of all these things. How do we make digital transformation work for the customer? It comes back to customer-centricity.
“Every action that you take around digital innovation needs to have the customer at the heart. What works well for the customer, what works best for the customer… those are the decisions you make.”
Regulation, which emerged as the third-biggest worry from the CEO survey, will no doubt impact the industry too in the wake of damaging evidence of bad behaviour exposed by the Hayne royal commission hearings.
An avalanche of new regulatory requirements is highly likely, KPMG says.
“There obviously has to be fallout across all of financial services sector and insurance will be caught up through enhanced regulation and enhanced regulatory oversight without a doubt,” Mr Guse says.
But increased compliance could also bring new opportunities.
“I think whenever you are faced with a problem, there is always the opportunity to turn it around and consider it as an opportunity,” he said.
“With increased regulation comes increased burden and increased cost, but there is potential to add value to customers by enhancing your product offering.”
Digital transformation emerged as the biggest issue in the CEO survey. Innovation and disruption placed second, followed by regulation, political paralysis and customer centricity.
1. Digital transformation
2. Innovation and disruption
4. Political paralysis
5. Customer centricity
6. Cost competitiveness
7. Public trust
8. Cybersecurity & data privacy
9. Big data
10. Infrastructure and liveable cities
12. Government efficiencies
13. Climate change
14. Health, aged care and disability
15. Education and changing nature of work