New Reality for Insurance

Published on 2020-08-25

Helping insurers sustain resilience in the face of uncertainty.

Throughout COVID-19, the insurance industry — along with all business — has experienced a time of monumental challenge. The impacts of this health emergency have expanded into far-reaching economic and societal issues. It seems clear that as we emerge from this period, it will be into a new reality that will look very different to what existed before.

KPMG insurance professionals have been reflecting intensively on — and widely discussing with clients — the nature of the upheaval taking place and what this means for insurers.

We start by exploring seven key macro themes that we believe are particularly relevant to insurers and which they must respond to in a fundamental way in order to thrive in the new reality.

Some of the seven themes have been with us for some time but have become greatly accentuated and accelerated in the wake of COVID-19 — such as financial resilience or climate change response.

Others, though, are almost entirely new. The fundamental importance of health in terms of staff, customers, products and economic impacts — what we call The Age of Biology — is one such example. The New Reality Workforce is another because, although remote working has been with us for many years, COVID-19 has elevated it to a new plain altogether, completely overturning old norms.

We list it as number seven — but in fact the imperative to become Digital First, Digital Now is absolutely core and runs across every single macro theme. COVID-19 has shown us the inter-connectivity of multiple forces and the response must be digital ways of working and originating business that drive speed, efficiency and a better customer experience.

Insurers have historically lagged other sectors in their digitization efforts — now, we have reached a watershed moment. It is time for insurance to catch up and re-emerge stronger and better.

We believe that investing in capabilities to respond to these trends may pay long-term dividends for an insurer.

The Seven Themes

  1. The Age of Biology
  2. The New Reality Workforce
  3. Ambidextrous Business Models
  4. Building Financial Resilience
  5. Climate Change
  6. The Innovation Imperative
  7. Digital First, Digital Now

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