While there is much talk about the disruption of insurance through cutting-edge technology that will fundamentally transform the way the industry works, the focus should instead be on how it will improve the customer experience.
That is according to Lee Kuyper, COO at SilverBridge, who says insurers need to capitalise on existing advancements for a better customer experience.
“In general, the experience of buying, changing, cancelling, and claiming on insurance policies has improved,” he said.
“But insurance is still not something that would be considered a pleasant experience. Increasingly, I see insurance becoming less of a stand-alone industry and more integrated into the events that trigger the customer’s need to get insurance in the first place.”
For example, when someone buys an asset, they can get it insured at the point of purchase given that all the details about the buyer and the asset are already there. There should be no, or very little, additional effort for the customer.”
Technological shifts
Even though there are established ways of working in insurance across Africa, insurers on the continent are open to technology-driven change.
“Africa is known for adopting technology quicker than in some other regions,” said Kuyper.
“This can largely be attributed to the infrastructure challenges that create a bigger need for more effective basic functions to be delivered.”
Mobile banking is a case in point. The adoption in Africa was far quicker than in most developed ones around the world. This was driven by the fact that branch and ATM infrastructures in those countries that have embraced mobile banking are virtually non-existent or largely inaccessible.
“Even though the insurance industry is still waiting for a leader that will bring significant change, the application of practical technology solutions is making the processes inside insurance more seamless from a customer perspective,” added Kuyper.
“Just compare how easy it has become to buy insurance today than a few years ago.”
Comparative advantage
When compared to other regions, Africa is right up there, even leading in some areas, when it comes to using technology to improve insurance.
“Most South Africans know how some insurers use technology-based ecosystems to develop solutions around people’s lifestyles,” said Kuyper.
“This not only delivers better service and products, but also helps these insurers better understand their customers to more specifically target their needs and price their risk appropriately. This is a model which is now becoming popular across the globe.”
Many African insurers work with smaller, less frequent insurable events. Termed micro-insurance, technology is a key component of these types of offerings. Similarly, many global insurtech companies are applying the same approach to niche insurable events.
While most of the ‘disruption’ that is occurring in insurance is just about improving the interactions and experience of the end customer, there are also some advancements being made which are more fundamental. Advanced technologies like Artificial Intelligence (AI) and Machine Learning are moving from simply being about the tech to becoming part of solving real business challenges.
“Historically, insurance pricing is based on actuarial models built up over the years using statistical methods. Using AI within engagement points, insurers can understand customers on an individual level in virtually real-time. This enables them to more accurately predict what will happen and can approach pricing and risk management completely different.”
This new age of insurance will be based on solutions that are far more customer-centric and relevant to people on an individual level. It is unlikely that it will arrive as an event but will rather be reached through real practical application of technology that in most cases already exists.
