Expectations of business growth have reduced since last year, with over half of New Zealand’s CEOs expecting growth over the next three years to be harder than before, according to KPMG’s new CEO Outlook Survey.
The survey revealed that though 92% of New Zealand’s CEOs have confidence in global growth, only 64% expressed confidence in their own outlook over the next three years. The survey, which drew participants from the insurance and financial services sectors, also showed that as many as 80% of CEOs expect 2% or less top line growth for the next three years.
The unstable geopolitical climate and a global return to territorialism were the biggest identified reasons for the lack of confidence, with cybersecurity and climate change also being cited as key concerns. Despite this, only 58% of CEOs felt “personally prepared to lead their organisation through a radical transformation of its operating model to maintain competitiveness.”
According to KPMG New Zealand chief executive Godfrey Boyce, the insurance sector needs to be quick on its feet and respond swiftly to market movements if it wants to see growth within the current climate.
“Financial services are looking at lower growth in terms of revenue, and that’s very consistent with the overall findings of the survey,” Boyce tells Insurance Business. “The fears that businesses have are certainly founded. There are some positives to our current situation, but, underneath all that, there is still a lot of fundamental uncertainty.”
“Insurance in particular is also facing fintech and insurtech-type disruption,” he explains. “Part of this involves partnering with those kinds of startups, and almost every financial institution and insurance company is looking into doing this. But they’re also realising that there needs to be a fundamental review of business and operating models, and an increased focus on customer experience – especially on gaining new customers in the under-40s demographic. Part of that is having that digital capability in place, but a lot of it is simply ensuring that you’re connected to your customer base.”
Boyce believes simplification of product suites is also a key thing to consider, as a streamlined business will likely have better potential for growth. The insurance sector has seen some of this in action, with several insurers selling off parts of their business to major players to focus on their core product offerings.
Overall, he says the survey aims to demonstrate the need for development, adaptation and progress.
“This is a catalyst for CEOs to refocus on what’s needed to thrive - building organisational resilience, embracing digital transformation and developing and maintaining a truly customer-centric ethos,” said Boyce. “These are all key themes that showed as top of mind for our leading CEOs.”
