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An emphasis on putting the customer first

02 October 2018Jonathan Faurie

The South African financial services industry garners a lot of respect and admiration when it is spoken about in international circles. The industry is described as well established, steeped in tradition, and has been a major driver of the country’s economy at times when the mining and agricultural industry were not performing at full capacity.

This does not mean that the industry is perfect. There are significant legacy issues that are becoming challenges as the influence of technology on the financial services industry is growing in prominence. 

Put the customer first

Over the past five years, insurance regulators have been on a mission to change the way that insurers do business. An emphasis on putting the customer first has been the major driver of this. 

While customer needs have always been a focal point in the insurance value chain, a significant amount of innovation needs to take place if the industry is going to improve the customer journey.

Speaking at the Munich RE Life Client Seminar, Patience Mudau – a Digital Underwriting Specialist at Munich RE – said that there are a lot of possibilities when it comes to enhancing the customer journey through automation. 

“Not much has changed when we look at how the client journey has evolved over the past 100 years. The challenges that we face now are similar to those that insurers faced many years ago; insurance is still largely sold and not bought; and clients see insurance as cumbersome, invasive and complex. We need to provide insurance products that encourage positivity. We need to focus on automation,” said Mudau. 

Hunting down new business

For many insurers, particularly in the long-term industry, there is a constant challenge to serve the needs of its client base while attracting new business. Millennials are the clients of the future. However, they have a rather precarious relationship with the insurance industry.

“Many Millennials believe that life insurance is hard work and they do not want to do it. Insurers still need to attract these clients towards the industry. Insurers know who Millennials are and know they have the biggest purchasing power when compared to any generation before it. Insurers need to enhance their technological capabilities,” said Mudau.  

Millennials are digital natives and are born into a technologically driven world. Mudau pointed out that they check their mobile devices 45 times a day and their spending habits are generally driven by the experience that they are likely to get during the transaction rather than the product/service that they want to purchase. 

Steps in the right direction?

Insurers have gathered significant insights into Millennials and have a pretty good idea of what drives them and makes them tick. Are these insurers investing in technology to improve the engagement systems that would drive the customer journey? 

John-Henry Horn - a life claims specialist at Munich RE – pointed out that successful automation is the result of careful consideration of several factors that would influence the client journey. 

“It is important that insurers are proactive when it comes to this. They need to develop an automation strategy, identify opportunities where automation can take place, and they need to consider the process and the effects that it will have on their business. Following this, insurers then need to evaluate the available technology and run a pilot project to see how automation would affect the business in a real case scenario,” said Horn. 

Automation is a challenge

While Horn acknowledges that automation is a process that can add significant benefits to an insurer, it can be challenging to implement. 

“Change within a business is challenging for staff members. However, studies have proved that automation improves efficiencies within insurers, and it helps insurers make the business more transparent,” said Horn. 

Technology has made many people within the financial services industry very anxious when it comes to job security. However, Horn believes that it is possible to support automation and find a way for it to work with people without replacing jobs. Automation can augment the client journey. 

“There is a clear vision when it comes to what the insurer of the future will look like. The customer will take its place as the heart of everything that the insurer does. Insurers will do business faster and will serve the needs of their clients in the best way possible. Automation will mean that there will be fewer errors within the business and communication will be able to take place at levels unheard of in the past,” said Horn. 

While automation can be a challenge for many insurers, they need to sit and consider what is the lesser of two evils; do they ignore automation and let the other challenges that they fact grow in significance, or do they embrace technology and fundamentally improve their business? 

Editor’s Thoughts:
The answer to this question may look easy to those who are looking at the industry from the outside. But for insurers, these challenges are very real and the decisions that need to be made when it comes to resolving these challenges cannot be taken lightly. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

Comments

Added by BLACK INSURANCE ADVISERS COUNCIL (BIAC), 02 Oct 2018
Found the presentation to be higly valuable.Just waiting for someone who will understand that our industry is that of extremes.We have FSP's who are in this space for more than two generations whose presence is valuable to their clients and the new generation who belive in doing their transactions anywhere any time. Calls for a balancing act. Our industry problem
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Added by Tim jones, 02 Oct 2018
Neither millennial nor older clients appreciate the mounds of compliance material that has to be waded through in even the most simplest forms of business cases. The whole compliance process has to be made simpler- this would help clients rather than hinder them.
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