Insurers are under more pressure than ever to effectively manage their current operating expense environment.

Persistent low investment returns, ever-increasing competitive pressures and the growing demands of regulation have hampered the industry’s ability to grow revenue faster than the rate of operating costs.

In order to better understand the current environment, KPMG and ACORD, a non-profit standards development organisation, recently completed a survey focused on the challenges and opportunities insurers face with respect to improving operational excellence.

Key findings from the survey include:

The majority of carriers say they are actively working on improving operational excellence.

However, over half of them are behind target.

There is limited integration of technology platforms across functions, including underwriting, distribution and product operations.

A lack of process standardisation and strategic vision are the primary obstacles to future transformation efforts.

The resulting report, Operational excellence in insurance: Performance, digital and customer experience, highlights the need for senior leaders across the strategy, technology and operations areas of insurance organisations to carefully consider several initiatives and transformations critical to operational excellence.

identify

By focusing on some of the key dimensions of the business, leaders can identify the core cost drivers and take steps to effectively manage costs in a sustainable manner.

Simon Nicholas, partner at KPMG Isleof Man, said: ’The survey responses make clear that the majority of these organisations are falling behind in their quest to improve operational efficiency, and that a lack of process standardisation and strategic vision is the primary obstacle to future transformation efforts.

’We are therefore assisting C-Suite (C-suite gets its name from the titles of top senior staffers such as chief executive) and senior leaders to carefully consider several approaches to correct these deficiencies, that include operating model and process redesign, legacy systems and alternative sourcing.

robotic

’Finally, intelligent automation and robotic process automation are solutions we have developed internally, on the island, making systems run more efficiently by automating manual non-value adding tasks and enabling systems to talk to each other with quick, low cost ’’bots’’.

’We are really excited by the results and believe this will be an area that will transform businesses.’

Survey results indicate that, although 94 % of carriers say they are actively working on improving operational efficiency, 55 % say they are behind target.

In addition, most respondents reported only limited integration of their technology platforms across functions, including underwriting, distribution and product operations - functional areas to achieving operational efficiency.

The report is available to download from the KPMG Isle of Man website www.kpmg.co.im