Disruption has been heralded as a business risk in itself, with a major broker pushing for more comprehensive consideration of market disruption among Australian companies, including insurers and brokerages.
The disruption boom themed Aon’s Advanced Risk Finance Conference, with the company’s executives insisting that game-changing interference needs to be considered by businesses if they are to successfully navigate future risks developments.
Aon Risk Solutions Multinational Accounts CEO Jason Disborough says that disruption, although varied from sector to sector, will continue to rattle Australian businesses in the coming years.
“As a risk advisor we are witnessing a significant shift in the risks that are posing concerns to our clients. 2015 has seen the emergence of disruption as a risk in itself – how it is impacting our clients and their business models in general,” Disborough says. [Click to Tweet]
“Disruption varies significantly by industry, with the hospitality and transport sectors amongst the first to witness significant disruption in the shape of new market entrants. Overall, the Australian market is witnessing an increased trend and shift towards a heavily disruptive phase, one which we expect to continue through the coming months and years.”
“The use of mobile applications and accessibility of data and relevant analytics, for example, are starting to make an impact on traditional business models and how people source solutions,” Disborough adds.
Aon Risk Solutions Australia Chief Executive Officer Lambros Lambrou says that the insurance industry is deeply affected by the emerging trend, with companies required to transform their offerings and transcend limitations simultaneously.
“It would be fair to say that the insurance industry as a whole is at the forefront of disruption,” Lambrou says.
“In recent years, changing market conditions have led to a significant change in the type of level and accessibility of insurance cover – emerging risks, particularly cyber and terrorism, are becoming increasingly important to our clients.
“The cost varies significantly, as does the level and scope of coverage and, as a result, has produced relatively soft market conditions and a highly competitive market.”
According to a recent report from KPMG, insurers should be first in line for an attitude shake-up, with innovation in insurance being demanded by clients due to emerging risks resulting from technological advancement.
With 83% of insurance executives agreeing that their ability to innovate is key to their company’s future growth, the report calls for an industry-wide transition from a risk-averse culture to one that welcomes experimentation while mitigating risks.
The report urges insurers and intermediaries to develop new business and operating models to manage the changing needs of their clients, while also competing with new entrants.