Giving emerging technologies the “nod”

Financial services professionals acknowledge technology as one of the primary drivers of industry change. Individuals involved in product design, development and distribution find themselves at the forefront of ongoing transformation aimed at streamlining processes and refining client experiences.

The financial services industry is predisposed to technology’s influence and improvements in insurance products and underwriting services have fundamentally altered the manner in which clients relate to the industry.

Insurance was simpler 10 years ago. Underwriters steered away from complex internal processes by offering fewer claims definitions. Nowadays the same organisations are selling multi-faceted critical illness and impairment contracts that feature layered benefit definitions and tiered payment structures. Insurance providers have no choice but to rely on technology to support these complex products as well as mitigate the risk associated with client non-disclosure.

More complex products demand that financial services providers obtain a deeper level of information from clients. Technology is an enabler in this regard, making it possible to gather and organise comprehensive client data as well as managing the intricacies of the new product offerings.

Technology exhibits in the internal automation engines in use by most 21st Century financial services providers. Underwriters and advisers would find legislative compliance and the minimisation of risk extremely difficult were it not for the complex and ground-breaking "apparatus” responsible for executing and allocating daily processes, for example. Automated processes show that technology, however intimidating, has the capacity to change the face of an industry.

The South African insurance and underwriting sector pioneered the development and roll out of comprehensive and client-friendly products. Several developed environments still trail behind us, offering "one size fits all” product offerings because these are easier to manage. The product innovation witnessed in recent years could not have taken place without automation.

Process automation should not be viewed as a substitute for skills. Technology is a complimentary resource that must be used in conjunction with knowledgeable professionals who can take the necessary action in the event of irregularities or abnormalities within the available information set.

Although technology within underwriting has focused heavily on product innovation and process monitoring, it is also redefining the way clients relate to a brand or group. Each and every potential customer is required to undergo medical examinations to detect previously unidentified issues which may impact the coverage policy.

To achieve this, local underwriters contracted teams of professional travelling nurses to meet the client at his or her place of work and perform the requisite tests. Although this streamlined the vetting process considerably, clients were still forced to wait four to five days for their laboratory test results to return before their policy could be issued.

Several local entities have since invested in new technology to streamline this process. Customers seeking insurance cover can be medically "examined” by way of non-invasive tests such as finger-prick tests (for HIV) or urine-stick Cotinine tests (to confirm smoker / non-smoker status). Thanks to advances in medical technology the policy can be issued swiftly and the insurer represented in a positive light.

The application of technology in the underwriting industry should not be confined to backroom processes. Change should be embraced and implemented in creative ways with a view to benefiting each and every facet of the modern day insurance organisation.

If South Africa wants to break new ground in the years to come then decision makers in the insurance sector must remain open to technology and the innovation it supports. It is not enough to simply move with the times – we must actively seek out how best to combine our experience with emerging technologies.