Rapid digitalisation and automation, driven by the development of technology such as artificial intelligence, has had impacts on all areas of the economy, and the insurance industry is no different.
Insurance is often seen as highly traditional, and this brings its benefits, but firms will have to adapt and embrace technological innovation, or risk being left behind. The success of the fintech sector in South Africa, which accounts for 40% of all fintech revenue in Africa, shows the level of appetite for a more innovative approach to financial services. Expectations have risen and intermediaries need to meet them.
The role of intermediaries will continue to evolve as they seek to balance traditional practices with innovative technology. There are significant challenges to getting this balance right, but if firms can achieve it they will make themselves much more competitive than the rest of the market.
Implementing technology successfully
Using technology effectively requires leveraging digital tools to enhance services, and harnessing the power of big data and analytics to gain deeper insights into clients. This will allow intermediaries to more easily tailor insurance coverage to specific needs, preferences and risk profiles. Without technology, this level of personalisation will be much more challenging to achieve.
In addition, more than simply connecting customers to insurance policies, intermediaries can use technology to expand their role and enhance the value that they offer. Beyond placing coverage, technology can also be used to enhance an intermediary’s ongoing relationship with a client, by allowing them to identify emerging risks and collaborate on risk management strategies.
In the case of a loss-causing event, automating loss adjustment can provide significant benefits for clients. Faster payment will be critical to minimising disruption, especially as climate change means that the number of losses in South Africa, and around the world, is likely to rise. In the face of more regular floods, droughts and destructive storms, automation will improve both the accuracy and fairness of payouts.
Getting the balance right
Technology can also make the customer experience much simpler and faster, if automation is deployed to processes such as client communication and claims management. This obviously needs to be done carefully, and intermediaries should never forget that to a large extent their role is about developing a relationship with their client, so that they are trusted. Maintaining a human touch to their services remains important, even as technology takes on a greater role.
While clients are increasingly comfortable with, and in some cases demanding, more digital interfaces and processes, those who can find the correct balance while introducing technology to their services will benefit from the best of both worlds. Intermediaries should continue to provide easy access to support teams, which will remain an important touchpoint, especially when systems go wrong.
Firms should also remember the importance of local knowledge and expertise – having people with a deep understanding of local markets and the challenges they face will remain critical. While automation can speed up certain processes, teams on the ground who can act as an effective bridge between clients and underwriters will remain invaluable. It not only ensures clients access the products and strategies that are most suitable to them and their geography, but also offers efficiencies during the claims handling process. Knowledge of local legal systems and claims processes goes a long way towards making the client experience much easier.
Successfully embracing digital technologies while continuing to offer human expertise will ensure that clients see that they are getting value as well excellent advice. The key to getting the balance right lies in intermediaries positioning themselves as trusted advisers in a complex risk landscape, while also using technology to make it easier for clients to access that expertise.
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