Life insurance industry revolution

THE LIFE insurance industry in the next 10 years would see a radical change in customer mix, with “traditional” consumers reducing sharply in favour of “digital natives” as the omnichannel revolution had begun to shape the future of the industry.

This is according to the latest report released by professional services firm, PricewaterhouseCoopers (PwC).

The firm’s strategy and life insurance in the Digital Age report said as customers had grown used to the service levels in other industries, they were similarly expecting the same from their life insurers.

“Understanding where life insurers are on their digital transformation journey and the implications of evolving customer and rapidly changing technology will help industry players weather the turbulent future ahead,” the report said.

The report found more than a quarter of customers were willing to transact and manage their needs on a completely digital basis, with little or no personal interaction. The findings also noted that a growing share of life insurance customers searched for products online, although the conversion rate was still much lower than for short-term insurance.

The report said customers were also more informed about product options and prices, which was influencing their purchasing and channel preferences.

“Our research suggests that in the next decade the percentage of life insurance policies sold online will have more than doubled in some developed economies and increased more than tenfold in some developing economies,” the report said.

Last week, Facebook’s global head of financial services strategy, Neil Hiltz, said South African banks and insurance companies needed to accelerate their investment in the digital and mobile space to better understand their customers and their investment decisions.

Hiltz, who was in the country to meet with industry leaders, said the country’s financial services companies were yet to fully appreciate how transformational mobile technology and digitalisation was going to help the future profitability of their businesses.

In a study conducted last year, Accenture said about 80percent of 1500 insurance customers it surveyed across South Africa said they were ready to purchase insurance products online. The research further found that the shortterm insurance in the country had been slow to go digital.

As a result, the sector was losing out on gross written premiums opportunities estimated to reach R115.2billion by 2020.