By Deepesh Thomas Digital Head of Standard Bank Wealth
Digital adoption has had a profound effect on the financial services industry in recent years, reshaping when, where and how customers interact with products and services. The advent of COVID-19 has accelerated these efforts as consumer demands for digital solutions grows because of social distancing and the new normal of working from home.
The insurance space is no different with key technology trends already shaping the way consumers interact along the entire insurance value chain. InsureTech – or the use of technology innovation to drive cost saving and efficiency in insurance – is already disrupting the sector in South Africa and insurers are exploring new technologies and philosophies to improve the consumers’ insurance experience.
Fail fast, succeed fast:
Speed to market has become key in insurance. Insurance start-ups have the advantage of being nimble by definition and larger insurers need to find new ways to compete. One way of doing this is the adoption of a zero-code platform approach to developing insurance products. Zero-coding allows insurers to create application software through means other than traditional computer programming. This allows to them prototype new products, test them with the market and launch them more quickly than the more traditional route. Using this approach, product development time can be cut down from two or three years to six weeks giving insurers the agility needed to meet consumer needs as quickly as they change.
Taking insurance to the people:
Insurance is not something people interact with daily. In most cases consumers only have three main touchpoints to their cover: at the time of purchase, at the time of a claim and in some cases at the time of renewal. One way of making insurance more accessible is to embed it into the existing digital landscape of a user by bringing it to a commonly adopted platform, which they are familiar with and find easy to use. WhatsApp presents an interesting platform for insurers to not only sell insurance but also communicate with customers regularly. Provides an alternative to a call centre while still providing a direct communication channel for consumers to seek advice, file a claim or make a query. The fact that is also allows for speedy two-way communication means that there is every possibility that this channel will become entrenched and shape the way customers interact with insurers moving forward.
Making homes smart to mitigate risk:
In the future homes will be smart. Through the use of sensors, computing at the edge and cloud technology insurers and homeowners will be able to mitigate risk through proactive management of the home. Everyone has heard the story of your fridge ordering milk but a practical example of this for the insurance industry is the addition of sensors on geysers in the home. These sensors monitor the geyser and can warn of imminent damage. A plumber can then be dispatched to repair or replace the geyser before it bursts and causes more serious damage in the home.
This same technology can be used to monitor abnormal water flows, monitor your electricity spend and to improve your security using CCTV technology. In this way insurers can create a value-added ecosystem which mitigates risk and helps you lower the cost of running your household.
Creating efficiencies through innovation:
Robotics processing automation (RPA) is another way insurers are reshaping service delivery. Traditional RPA models include a data analyst that sits with an individual for a period mapping out their work processed in detail, identifying the key pain points and opportunities for automation. More modern versions simply install software onto an employee’s computer to observe their everyday routine. This software then uses machine learning to map processes and create efficiencies in workflows and processes. You can also map out the process as the business user which you want to be automated. RPA, when deployed correctly can increase efficiencies across the entire insurance value chain from sales, to the servicing, and claims components.
Making insurance more transparent:
There is a need to make insurance more transparent for both customers and insurers. This is especially true for the claims process. Blockchain allows us to automate certain claims and at the same time make the process wholly transparent. For example, a windscreen is between R750 and R1500 to replace. In that process the cost of assessment of that claim itself is high. Blockchain allows us to automate the process tracking previous claim behaviour and integrate with the service provider. Both the insurer and the customer have visibility to the entire value chain as a result.
Digital adoption has accelerated exponentially in the last few months because of the demand created by our current world conditions. Agility, cost saving and the ability to adapt to client needs will be integral to how insurers operate in the future.
InsureTech is sure to grow as more and more consumers move to digital platforms to manage their lives and financial needs.