How tech trends are shaping the insurance industry

With unprecedented technological advances and shifting customer and employee expectations, the South African insurance landscape is set to keep changing. Metropolitan’s Berniece Hieckmann, accountable for Metropolitan’s “Business of Tomorrow” strategies, takes a closer look at tech trends that are compelling the industry to stay ahead.

“It has been said that if you dislike change, you’re going to dislike irrelevance even more. This is true for the financial services industry where large insurance companies must continue to move with the changes in consumer needs and behaviour or risk being left behind,” says Hieckmann.

The digital transformation of the industry has forced companies to make the shift from simple digitisation – typical of the Third Industrial Revolution – and improve the way of business by harnessing the full potential of the combined technologies, which is typical of the Fourth Industrial Revolution.

Hieckmann says this move is compelling insurance companies to re-evaluate the way they conduct business. “Digitalisation opportunities for businesses are layered. They are not only about selling products directly to clients through digital channels, but some of the massive opportunities presented by technological evolution are “under the hood” of the business.”

She cites the example of Metropolitan’s successes in removing obstacles from its advice, enrolment and claims processes for clients.  “The focus here has been on using smart technology and analytics to remove any effort needed by a client to enjoy the benefits of our products and services.

“Technology can reduce the cost of doing business in multiple places along our value chain, enabling us to create further value for our clients and shareholders.  Technology and data also help us understand our clients more holistically. By tracking customer behaviour, we can design more relevant products and processes, as well as pre-empt client needs.  Automated and robotic processes remove repetitive and mundane tasks as well as reduce the incidences of errors,” she explains.

There is no doubt that the use of artificial intelligence, machine learning, robotics, the internet of things (IoT) and behavioural analytics will continue to play a major role in shaping the industry. These technologies have led to insurers providing consumers with a new generation of digital products and lifestyle apps. Metropolitan has used the potential of analytics and AI in several applications.  Most significant is our ability to process funeral claims completely paperlessly within minutes.

“With evolving consumer market expectations, we realise that South Africa’s emerging market is a mobile-first generation who expect ease of access, convenience, simplicity and efficiency. That said, they have affordability constraints in a market that is characterised by low growth and high unemployment. This generation needs real solutions and outcomes for every life stage, as opposed to a one-size product. They are also looking for value for money,” notes Hieckmann.

She says Metropolitan’s research shows that while brands matter to Millennials and Generation Z’s, these demographics have a high need to be respected. “They are a rising force in South Africa and advocates of Afro-futurism and community centricity.”

“We also know that culture and tradition are important drivers for insurance and that our clients value personalisation,” says Hieckmann.

With data and analytics driving policy personalisation, this can include personalised product pricing that is tailored to an individual’s exact needs.  This level of personalisation was not previously possible as, without the assistance of modern digital capabilities, personalisation of solutions came at a high level of cost and complexity.

Hieckmann says modern open API platforms can integrate and customise solutions for clients without the heavy cost and complexity overheads of the past. “By way of example, Metropolitan’s sister company, Guardrisk, recently introduced ‘on-demand’ insurance for motor vehicle hire contingent risks, which can be bought through a bot-driven WhatsApp engagement, in mere minutes.”

“With this determined shift towards delivering personalised insurance solutions, the result is that the policyholder will benefit and be firmly placed at the heart of our business – exactly where they should be,” concludes Hieckmann.

By Berniece Hieckmann

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