Insurers are missing opportunities to play a more prominent role in tackling global challenges such as climate change, disaster resilience and infrastructure investment because they lack innovation, according to a report from KPMG.

The report – Demystifying the Public Private Partnership Paradigm – says many insurers struggle with innovation strategies, which stops them capitalising on new market opportunities.

KPMG questioned almost 300 insurance executives in 20 countries about their innovation strategies, and found 45% of insurers have no formal strategy.

Only 8% of respondents have a chief innovation officer, and 40% consider innovation an informal collective responsibility rather than a structured activity with lines of executive accountability.

KPMG Global Insurance Innovation Partner Mary Trussell says insurance leaders “must think differently about the world”.

“Global risks are increasing in variety, volatility and volume,” she said. “Insurers will either need to innovate or raise premiums and add more exclusions, which has implications for economic growth.”

The KPMG report – published to coincide with the annual International Insurance Society global forum in New York this week – urges an increased role for insurers in public-private partnerships, to overcome barriers to innovation such as regulation and lack of core skills.

It says the insurance industry has a “fundamental and central role” in the worldwide response to issues such as climate change, natural catastrophes, financial inclusion and sustainability – and insurance companies are not the only groups that should update their thinking.

“We also believe that… policymakers, intermediaries, development organisations and regulators will need to update their understanding of the role that insurers can and should play.”