In every territory across the globe, there are significant challenges with the potential to impede economic growth, and Africa is no different. Unemployment and extreme weather events, coupled with a lack of infrastructure and skilled labour, are all threats to the region's businesses – and the insurance industry is key to mitigating these risks.
As more and more South African companies expand abroad, they face additional risks. Yet insurance currently covers just 10% of the risks faced by businesses globally, so there are significant opportunities for insurers to develop innovative products that meet these requirements.
One way to achieve this and create a competitive advantage is through the emergence of new technologies such as big data, telematics and driverless cars. These all provide richer data for greater risk insight and improved product pricing, as well as helping to mitigate high costs and security risks.
While more data means additional threats, the converse is also true. Big data enables potential risks to be identified, so that cybercrime incidents can be anticipated and prevented, replacing the need to react belatedly to security breaches.
Along with increased digitisation and the ongoing challenge of regulatory reform, insurers need to react to changing customer expectations and attitudes as consumers become more knowledgeable. Customers are becoming better informed and more connected every day, so their service expectations are ever more demanding and sophisticated.
A recent Celent survey on innovation showed that consumers expect a high degree of innovation from their financial service providers, especially when it comes to service delivery. However, while most financial services professionals agree that innovation is essential for relating to and engaging with customers, only a minority identify innovation as a critical part of their company's strategies.
For insurers to be able to offer advice in a way that provides real value and that customers will be willing to pay for, it is critical to understand their perception of advice – and this is another area where technology can help. The ability to measure, understand and predict consumer behaviour will lead to an improved customer experience through tailored products, service and advice.
By putting customer relationships at the heart of everything they do and developing effective partnerships with brokers, insurers can provide innovative solutions to manage evolving risks both today and in the future.
To ensure success, insurers need systems that are capable of achieving change and evidencing this. However, a number have not got to grips with the integration of their software, leaving them struggling with legacy systems and the need to take bits of data from everywhere. Adopting a modern platform will make it much faster and easier for insurers to add new functionality, to respond to change, to modify processes and to adapt to new legislation or best practice.
About the Author
Rhys has over 25 years’ experience of the application of technology within the UK and African insurance markets.More Content by Rhys Collins