The challenge Over the past decade, the insurance industry has had its share of disruptive

events: major booms and bursts in stocks and real estate markets, continuing

industry consolidation, a regulatory tsunami, the emergence of independent

distribution, and steady growth of the product portfolio, to name a few.

Meanwhile the operating model of insurance companies remained unchanged,

with following potential drawbacks:

Sales organization inadequately adapted to latest changes in distribution •

channel and product portfolio mix.

Non-optimal operational processes for contract, claims and investment •

administration departments.

Risk and finance organization insufficiently adapted to the forthcoming •

legislative requirements (Solvency II, IFRS 2).

Inappropriate ICT architecture, insufficiently aligned to real business •

needs.

To meet these challenges, consider transforming your operating model.

The challenge Your benefits KPMG approach Credentials Contact

FINANCIAL SERVICES

Target Operating ModelHow insurance markets, legislation and technology are speeding the need for an operating model review

KPMG ADVISORY

kpmg.be

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Realignement ofglobal economic

activities

Operatingmodel

Managing risk and compliance (Solvency Il,

IFRS, etc.)

Technological evolutions

Cost reduction programmes

More competitive business

environment

Continuing Industry consolidation

Increasing product portfolio mix

Increasing distribution channel mix

Your benefits

KPMG approach

Operating model transformation can generate substantial business performance

improvements for the insurer, including:

Greater market profit margins.•

Reduction of new product introduction time.•

Significant reduction in service costs per policy.•

Reduction in IT operating costs and customer service staffing.•

KPMG’s Target Operating Model (TOM) service helps organizations in the

insurance industry successfully realise business strategy by constructing

optimal business architecture. It provides a framework for making decisions on

operational strategy such as what functions should be shared, how functions

should be configured in size and budget, and where operations should be

performed and by whom. The model itself is flexible, and can range from

simple, local model (e.g., a blueprint for a specific departmental change) to a

complex articulation (e.g., a major global transformation of an organization).

The TOM services covers all dimensions of the business that contribute to the

realization of a vision:

Organization, geography and governance review.•

People and required skill sets.•

Business process and methodology review.•

Review of information systems and technology.•

Performance management through key performance indicators.•

Credentials

Contact

KPMG’s TOM service includes four phases:

1 Diagnose the current state operating model.

2 Define the desired future state target operating model, including

comparacing with the outcome with leading practices in the market and

with internal objectives of key stakeholders.

3 Perform a gap analysis. Define quick wins and midium-term action plans.

4 Manage the transition stage.

The Performance & Technology team at KPMG Advisory has built up solid

experience and proven methodology translating technical and practical

knowledge into successful Target Operating Model solutions which are

fully embedded, for a variety of national and international financial services,

insurance and asset management companies.

Our team has a good balance of insurance industry experience and business

performance improvement knowledge.

Bart Walterus

Partner

KPMG Advisory

Tel. +32 2 708 38 80

E-mail: bwalterus1@kpmg.com