IFAs impacted by change in consumer behaviour
While economic conditions and changes to the regulatory and governance environments are predicted to play a major role in shaping the future of the insurance industry, it is the significant change in client behaviour that will drive the biggest evolution in this space.
This is expected to have a profound impact on the role of independent financial advisers (IFAs) and how they interact with consumers and financial services firms.
Trends in both mature and developing markets show that consumer behaviour and expectations are rapidly changing in terms of the speed of delivery of and accessibility to financial products, notes Etienne Gouws, CEO of Momentum Intermediary Solutions.
“Modern-day consumers are digital natives, who want to interact with financial services companies directly, via digital channels. This demographic is mainly composed of millennials, who demand ease of use, convenience and simplicity,” he says.
In turn, the shift in client behaviour is driving rapid technological advances and innovation in the insurance space, which includes the adoption of digital solutions, such as artificial intelligence and process automation.
“As a result, the insurance landscape is seeing the emergence of fintech start-ups, which are responding to demands for technology-backed financial product innovation. IFAs will need to adopt new technology to improve onboarding, underwriting, servicing and claims processes outcomes and speed up the delivery of solutions to clients,” says Gouws.
Aside from the change in client behaviour, insurance companies are also turning to technology in a bid to achieve cost savings in their operations rather than passing on additional costs to the consumer and adviser. Insurers are thus increasingly adopting more advanced automation, driven by software that runs automated tasks, known as ‘bots’, as well as machine-learning algorithms.
A recent PwC Africa Insurance Survey says while the African insurance industry remains one of the least penetrated in the world, it is seeing significant disruption and how changing customer expectations are shaping its future.
The report notes that as Africa’s number of connected devices increases, customers have become far more analytically enabled, and broker dominance will gradually reduce as insurers invest more in in-house agents.
In light of the rising pressure on IFAs, Gouws says Momentum –supports IFAs to successfully deliver on their promises to clients, and to ensure their continued journey to success.
“We have started on a journey to redefine the value that IFAs can unlock from our offering. We understand that we must truly meet the needs of the IFA and their clients. It is a partnership and consultative approach, and we invite all advisers to engage with us on this,” he concludes.
