INMAG_June2010-1:page layouts
27/5/10
10:17 AM
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Reuters
Outperforming as the market recovers
Insurers are opting for geographic expansion to restore growth
Australia’s insurers must change, adapt and leverage their post-GFC opportunities to keep growing and stay competitive By Glenn Sedgewick, Head of Insurance Services at Accenture Australia
THE AUSTRALIAN RISK INSURANCE industry has survived the global financial crisis, but the strategies that have worked well for many of the big players have also benefitted their competitors, creating a more aggressive industry landscape. The challenge now is how to differentiate and get ahead in this increasingly competitive market. Throughout last year sur vival strategies such as cost control, efficiency and risk mitigation were implemented by many organisations to streamline their operations, increase productivity and lower their costs. As a result of this renewed focus on business efficiency, there’s now a new benchmark on cost which has become the norm for many companies. General cost structures are not the only thing that have made the landscape more competitive. The insurance industry must also consider regulatory change, technology and internationalisation in order to stay ahead. Currently there are a number of regulatory reviews underway which are likely to change the rules and behaviours of the insurance market. The IT industry, in particular, needs to prepare for scenarios which insuranceNEWS
June/July 2010
break the linear trend of development in the industry. This will include responding to demands for new reporting or capital positions and creating innovative products which satisfy the new rules. For example, the recent announcement of regulations based around fee for service to replace existing commission structures for the financial planning industry will have significant implications for existing technology infrastructure. This will create new products that will also require new technology platforms. The emergence and increasing use of social media and other Web 2.0 tools has dramatically altered the ways companies interact with their customers. For instance, purchasing advice and product information is being more actively disseminated from consumers to other consumers – in some cases without involvement or oversight by the provider. Consumer technology presents many opportunities to build a distinctive capability that serves as a building block to high performance – a method to potentially connect more tightly with customers at lower cost, and in a way 47