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Embrace the pace of change

ARTICLE BY

  • Fulcrum

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Delarey van Dyk, Fulcrum Premium Finance, Managing Director

 

The question companies should be asking today is not why you should innovate, but rather how are you innovating, and at what speed?

Innovation is no longer a buzzword. It’s a mindset – a way of seeing the world – that separates leaders from followers. You probably hear ‘innovation’ and your mind jumps to ‘new technology’. But we see it differently. Technology is merely the tool we use to reach the ultimate goal of innovation: to make our customer’s lives easier – to ease their frustrations and make their dreams more accessible.

The challenging part is that an innovation mindset requires you to think and react at lighting speed or risk losing revenue to more nimble, forward-thinking competitors.

South Africa’s insurance industry has always lagged behind the rest of the world when it comes to innovation, mainly because of high internet data costs and limited infrastructure. But South Africans have grit and imagination like none other and despite the barriers to entry, the insurtech start-up scene is thriving.

Companies are using technology to remove friction and transform the customer experience by carefully listening to their customers and challenging long- held assumptions about insurance.

Risk-free underwriting, on-the-spot purchasing, and activation and claims processing are among the forces that are disrupting and transforming the insurance industry for the better.

Here’s how this disruption is happening.

Automating underwriting
Underwriting is known for being painfully slow and tedious. However, technology has now introduced advanced algorithms that rely on new sources of data and individualised risk selection. This has introduced products at a wider range of price points due to improved price sophistication and new data.

These machines help eliminate the persistent customer pain points that come with inefficient traditional underwriting methods. Minimising human involvement can help remove bias to ensure customers get fair rates and leave more resources for insurers to focus on customer service and scale.

Accelerating the application process
Before the introduction of tech, it would take weeks before applicants received approval on insurance policies. Now, thanks to AI and mobile apps, the process has been reduced to a couple of hours, if not minutes. Customers can fill out easy-to-understand application forms from any time and place, before submitting them to be analysed by sophisticated algorithms that determine the applicant’s eligibility.

Responsiveness will also be a growing tactic for insurers aiming to digitise customer pain points. If customers can’t get information or advice at will, they’re likely to go to a competitor that offers this service.

Streamlining claim filing
Customers are ready to leave manual claims processing behind. End-to-end automation is another way that insurtech startups are offering an exceptional digital customer experience. The concept is simple: enhanced data collection enables customers to report a claim via mobile apps and have their claim reviewed and approved. Their payout is almost immediate, which is a massive win for an already stressful, time-sensitive event.

New service offerings typically involve customers taking pictures to expedite the process, but some go further. Data that has been aggregated from sources like smart devices and satellite imagery helps provide a comprehensive picture of events in very little time, making insurance payouts more accurate while streamlining the process.

Personalising product offerings
Today, customers want flexibility and highly- specific, targeted policies. They also want the ability to decide when and how often they can purchase.

AI technologies are helping insurtechs offer highly- personalised products by analysing an applicant’s insurance needs and financial standing to create a customised plan. Tools like this make worries about unexpected expenses a thing of the past.

Welcome the insurtech revolution
So far this year, South African startups like Naked and Pineapple have secured millions of dollars of funding, which reflects the confidence investors have in insurtech.

To stay ahead, many banks have partnered with fintech startups to help lower costs and reduce their reliance on legacy systems. Insurers should look to these partnerships as an inspiration for improved customer experience and client retention through digitisation and user-centric mobile solutions. A key area as we move forward is a greater focus on raising customer interest and encouraging interaction.

Insurtech is an opportunity to create partnerships and grow through strategies that offer value in an increasingly digitised financial ecosystem.

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