By: Luke Jones, Published on December 8, 2016 03:10 PM, Last Update on December 24, 2016 12:11 PM
Speaking at KPMG’s 25th Annual Insurance Issues Conference, Matthew Smith said that the insurance industry is going through structural changes and companies must be prepared to be a part of the future. Smith is insurance co-lead for the Global Strategy Group at KPMG.
“The insurance industry is facing into a structural change. This is not a cycle; this is a fundamental structural change,” Smith said Wednesday during the KPMG event in downtown Toronto. He is based in the United Kingdom and added that platform-based business models are changing the industry and insurers must keep up.
Smith cited advancements in other industries as how platforms are changing business, while insurance will be impacted by fintech and insuretech developments.
“Netflix is probably the biggest provider of cinema content, but owns no cinemas; Uber is the biggest taxi firm, but owns no taxis; Airbnb is one of the biggest providers of accommodation, but owns no hotels,” Smith said.
“This platform-based business model is about connecting and convening and finding easier ways to choose to get to the things that they want,” he told attendees.
While insurers must be prepared, there are reasons to be hopeful and companies should be “very exciting because it creates a whole host of opportunities for us.”
Autonomous vehicles are a part of this need to adapt to changing structures.
“We’ll continue to see that theme as, more and more, the lines of traditional industry get blurred and people move from what was their core business into adjacent opportunities elsewhere,” Smith argued.
“You can put insurance right in the centre of (sector convergence) because it touches and is touched by all of these industries,” he said.
Improving the client experience is also important, Smith added. “People demand that experiences that are easy in parts of their lives are repeatable across all the experiences they have in their lives.”
“That interaction doesn’t mean frequency; it doesn’t mean that we’re trying to be in contact with them every day about their insurance policy. That’s not what they’re looking for,” Smith explained. “It means when they have to have those points of interaction, it’s easy, it’s convenient, it’s fast,” he said.