KPMG, a professional services firm, surveyed 175 senior insurance executives at its 12th Annual Insurance Industry Conference and found that insurance firms are pursuing a number of future strategic options. In addition, the executives felt that more strategic e-business vision is needed.
According to the survey results, only 10 percent of the insurance execs see their firms holding their present strategic course. Facing increased competitive pressures and M&A activity, 30 percent see themselves in an acquisition mode, 28 percent say they will pursue a niche specialty product or market focus, 17 percent will seek out an alliance partner, and 15 percent feel their firms will be acquired.
“In light of regulatory changes and overseas competition, companies are repositioning themselves,” said Christopher J. Swift, national industry director for KPMG’s Insurance practice. “The landscape has changed, and it is evident that insurance firms are laying out a more strategic course.” In response to the question “over the next three to five years, who do you see as your major competitor,” 53 percent noted international financial services companies and 32 percent said insurance companies. In response to questions on e-business, 40 percent of the insurance executives said their firms lacked a strategic vision and 26 percent said their firms lacked e-business skills. Furthermore, 53 percent felt their firms were even with competitors on e-business progress, yet 30 percent voiced that they were significantly behind.
“So much is written on the e-business front that one would get the feeling that their firm is behind,” said Swift. “I can assure you that e-business issues are certainly something that all firms are grappling with.” In terms of marketing, the insurance execs continue to see the baby boom generation as their bread and butter, with 51 percent saying that they have a high degree of preparedness in serving the changing needs of boomers. Only 17 percent felt they were prepared to serve the needs of Generation Y.
“It’s imperative that they develop a more rounded marketing approach,” adds KPMG’s Swift. “This will also help diversify revenue streams.”
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