In­sur­ance for techies

Firms take aim at Africa’s ‘dig­i­tal na­tives’

The Sunday Independent - - METRO - ED­WIN NAIDU | SI­MON DAW­SON

MULTI-NA­TIONAL in­sur­ance firms are greed­ily eye­ing Africa’s hun­gry pen­chant for mo­bile de­vices to sell their prod­ucts cheaply us­ing tech­nol­ogy to a new gen­er­a­tion of tech-savvy cus­tomers dubbed “dig­i­tal na­tives”.

While the con­ti­nent’s in­sur­ance in­dus­try is largely un­der­de­vel­oped, ac­count­ing for less than 1.2% of in­sur­ance pre­mi­ums writ­ten glob­ally, many firms are pin­ning their hopes on re­newed eco­nomic re­cov­ery, on the back of ris­ing com­mod­ity prices along with Africa’s grow­ing young pop­u­la­tion, ris­ing lit­er­acy lev­els, and rapid ur­ban­i­sa­tion lead­ing to a rise in in­sur­able lives and as­sets.

And tech­nol­ogy is seen as the key driver to tar­get Africa’s emerg­ing mid­dle class, who may look to safe­guard their new-found wealth or prop­erty ac­quired through in­sur­ance, ac­cord­ing to “Ready and Will­ing: African in­sur­ance in­dus­try poised for growth”, a 2017/2018 re­port on the in­dus­try re­cently re­leased by PwC Africa, the global as­sur­ance, ad­vi­sory and tax ser­vices firm.

The sur­vey, de­vel­oped by PwC South Africa in con­junc­tion with the PwC Mar­ket Re­search Cen­tre in Lux­em­bourg, was con­ducted on­line be­tween July and November 2017 and can­vassed the views of in­sur­ance ex­ec­u­tives in Ghana, Kenya, South Africa, Uganda, Zam­bia, and Zim­babwe.

Ac­cord­ing to sur­vey re­spon­dents, the con­ti­nent’s new gen­er­a­tion of tech-savvy cus­tomers or “dig­i­tal na­tives” has be­come the new mar­ket for growth.

“Their dif­fer­ent in­sur­ance needs and how they want in­sur­ance to be sold to them are dis­rupt­ing tra­di­tional dis­tri­bu­tion and busi­ness mod­els.

“With the rapid change in de­mo­graph­ics, the num­ber of con­nected de­vices is also grow­ing.

“Dig­i­tally-em­pow­ered cus­tomers are putting pressure on in­sur­ers to re­spond to new chal­lenges from affin­ity groups, so­cial me­dia net­works, and other com­mu­ni­ties that con­nect in­di­vid­u­als and shape opin­ions,” the re­port says.

As a re­sult, mo­bile ac­cess, omni-chan­nel ac­cess, speed, pa­per­less trans­ac­tions, trans­parency, and re­mote ad­vice are some of the ex­pec­ta­tions of the “new” cus­tomers re­quir­ing dif­fer­ent ap­proaches to cus­tomer in­ter­ac­tion, prompt­ing dra­matic changes to un­der­writ­ing plat­forms for pol­icy quo­ta­tions and re­newals, claims pro­cess­ing and the pay­ment of claims and col­lec­tion of pre­mi­ums, which are go­ing on­line, be­com­ing ac­ces­si­ble for their prod­ucts.

Some in­sur­ers, ac­cord­ing to the sur­vey, are en­ter­ing part­ner­ships with tech­nol­ogy com­pa­nies to im­prove oper­a­tional ef­fi­ciency and re­spond quickly to chang­ing cus­tomer ex­pec­ta­tions.

There are in­sur­ers in Africa al­ready work­ing with In­surTech com­pa­nies, with 45% hav­ing al­ready es­tab­lished part­ner­ships to bring so­lu­tions to the mar­ket quicker.

“Ac­cord­ing to our sur­vey, a sig­nif­i­cant num­ber of in­sur­ers are al­ready mak­ing large-scale changes to sys­tems, op­er­a­tions, and strat­egy. How­ever, the costs of mov­ing from legacy sys­tems, and the time and re­sources re­quired for new im­ple­men­ta­tions should not be underestimated.

“Chal­lenges re­main, mainly around re­liance on slow out­dated sys­tems, and the dif­fi­cul­ties and costs as­so­ci­ated with mov­ing old busi­ness to new plat­forms,” the re­port says.

So­cial me­dia was iden­ti­fied by all re­spon­dents as the area where they have plans in place or are de­vel­op­ing strate­gies to change, com­pared to just 72% in the last sur­vey.

This client-cen­tric fo­cus by the in­sur­ance in­dus­try is mo­ti­vated by sta­tis­tics from the 2018 “Mo­bile Econ­omy Sub-Sa­ha­ran Africa” re­port, which says that the sub­scriber base in the re­gion to­tals 444 mil­lion, equiv­a­lent to around 9% of sub­scribers glob­ally, while Africa’s share of the in­ter­na­tional in­sur­ance mar­ket is un­der 1.2%.

But by 2020, the re­port pre­dicts that that fig­ure will num­ber over half a bil­lion, mak­ing Africa the fastest grow­ing mar­ket, putting a glint in the eye of in­sur­ance firms.

The PwC re­port says tai­lor­ing of prod­ucts to client-spe­cific needs is be­com­ing the new way of do­ing busi­ness, and cus­tomers al­ready en­joy in­stant ac­cess to most of the in­for­ma­tion they need to com­pare or con­trast brands.

Switch­ing be­tween in­sur­ers is eas­ier in a dig­i­tal world where brand loy­alty is less im­por­tant, but the re­port adds that mak­ing prod­ucts more ac­ces­si­ble is not the end.

Prod­ucts must be eas­ier to un­der­stand, cheaper to dis­trib­ute, and ap­pro­pri­ate for spe­cific needs.

AN EM­PLOYEE per­forms a ‘smart mir­ror’ fit­ness train­ing demon­stra­tion at the In­fi­neon Tech­nolo­gies AG stand at the Mo­bile World Congress in Barcelona, Spain, ear­lier this year. A smart mir­ror is a two-way mir­ror with an elec­tronic dis­play be­hind the glass. The dis­play can show the viewer dif­fer­ent kinds of in­for­ma­tion in the form of wid­gets, such as weather, time, date and news up­dates. Bloomberg

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.