The insurance sector is struggling to plug the so-called protection gap, Mary Trussell has warned.
The partner for consultancy KPMG International warned that lack of innovation was the single biggest factor affecting the insurance industry across Europe and the UK, and this was having a knock-on effect on providing advisers and their clients with the products and services they need.
She said: “The reality is that insurance customers, shareholders and employees demand innovation. They expect it, not only from technology providers and device manufacturers, but also from their providers.”
Her comments came as report from KPMG revealed that rapid innovation has created widespread challenges for insurers, with 48 per cent saying they had already seen disruption from new and more nimble competitors.
The 44-page report, A New World of Opportunity: The Insurance Innovation Imperative, surveyed 280 insurance executives in 20 countries, industry leaders and new entrants in the FinTech world and found that the need to innovate was already creating significant pressures on the sector.
Most respondents saw innovation as a significant opportunity, with 83 per cent stating that their organisation’s future success was closely tied to its ability to innovate.
Many organisations claimed they were also struggling to exploit opportunities to innovate from within with 79 per cent saying they were “already running” just to keep up with day-to-day requirements.
Meanwhile, 74 per cent said they lacked the internal core skills needed to drive innovation.
Jon de Beer, assistant director for the ABI, said: “Insurance is a highly competitive marketplace in which no firm can afford to stand still. As KPMG found, more than 80 per cent of firms globally see innovation as a major opportunity.
“We can see evidence of that in how the sector is responding to emerging risks such as cyber security and climate change. Insurers work hard to stay ahead of the pack and stand apart, which is beneficial to consumers.”
Emma Thomson, life office relationship director for London-based LifeSearch, said: “I agree that much more innovation is needed in our market place to attract today’s consumers who want efficient processes, and to ensure there is real choice on the quality and level of cover, rather than to compete largely on price.”