I recently participated in a panel discussion about operations transformation as part of the Frontiers for insurance series. The discussion was hosted by KPMG Canada's Chris Cornell, and also featured my fellow KPMG colleagues Sonya Gulati and Jonathan Weir. Chris provides an overview of our conversation in this post. I wanted to share some of my own thoughts directly.
In the wake of the pandemic, I expect insurers will continue to face increased pressure. Many insurers have been under-investing in their systems and operational processes for several years, and the imperative now is to find more efficiencies. On the positive side, the pandemic taught the industry that digital transformation can happen quickly, and many insurers are working to hold onto the gains they made during the past 18 months.
Having efficient backend processes is especially important in the life insurance space—things like valuation processes, pricing, and experience studies. There are huge opportunities for automation here, and the life players could perhaps learn from the P&C players who've done more on the analytics front. But even more than automation, it's about creating an ecosystem where customers and staff can interact digitally.
These transformations don't have to start from scratch: working with a partner lets insurers start mid-way along the transformation journey, after which they can customize the solution and integrate it into their ecosystem. A lot of technology vendors are looking to pre-invest in solutions for their clients, and many of them are in areas related to operational transformation. It's also important to note that supporting an emerging culture that's continuously improving and comfortable with change is going to take more than technical skills—it's going to take a greater respect for operations.
Above all, we need to remember that operational transformation has a direct impact on customers. Globally, Canada is still behind the curve. The insurance industry is ripe for disruption, and if you don't offer a particular service, it's highly likely that somebody else will. Digital development is making that more likely, especially since the hurdles to entry are getting lower and lower. Insurers in Canada also have an opportunity to diversify their talent, and for some, finding people with international experience will let them move the dial faster than they would if they looked internally for skills.
You can watch our full discussion here. And if you have any questions, please don't hesitate to reach out.
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