Insurers need to innovate to tackle global risks such as sustainability, but a worrying 45% of insurers admit they have no formal strategy for achieving this, KPMG has warned.
In a report, the consultancy said innovation would enable insurers to find commercial opportunities in addressing the world's environmental and economic challenges through partnerships with organisations such as governments and NGOs.
Based on a survey of 280 insurance executives across 20 countries, the report found 40% of respondents considered innovation to be an informal collective responsibility for the entire organisation. Another 8% said their chief innovation officer should be responsible for new ideas.
In addition, 74% said they lack the core skills to drive innovation. Some 79% say they are "just trying to keep up" with what they are already doing, while 14% said they lacked the board-level sponsorship required to drive innovation.
Gary Reader, global head of insurance at KPMG International, said: "Our experience suggests that insurance organisations will need to improve their focus on driving innovation across their organisations if they hope to identify, create and benefit from new partnership opportunities with non-traditional players such as governments, NGOs and infrastructure operators."
Mark Spears, KPMG's global head of people and change, said most organisations were structured to "kill innovation" through regulation and compliance requirements such as "burdensome review processes" and "irrelevant quality controls".
"There is very little about organisational structures that encourage people to think outside of the box," he added.
KPMG called for global insurers to develop partnerships with the public sector to achieve long-term commercial growth and support global economic development in both mature and emerging markets.
Reader said: "With the insurance industry continuing to play a more active role in helping the world respond to seemingly intractable global challenges such as climate change, disaster resilience and economic sustainability, insurers are cultivating new and innovative partnership agreements.
"We are already seeing some of the world's leading insurance groups taking significant steps by creating and growing partnerships with public, private and non-governmental organisations. Those who have innovation at the heart of their business can capitalise on these opportunities."
