Captivating trends for short-term insurance
Today’s abnormal is tomorrow’s normal is a quote that certainly resonates with current economic and industry circumstances. South Africa’s short-term insurance landscape is constantly changing, either through technology or legislation or sometimes as a result of pure economic circumstance; often beyond our control.
Changes affect all players in the industry and, more importantly, the reason many of these changes are brought about is to enhance and improve service delivery and protect customers. To this end, we have seen a raft of legislative changes over the years, with the aim of ensuring fair treatment for all policyholders. Going forward, additional changes are undoubtedly expected as customer demand grows and as the business environment evolves and expands.
Catapulting technology
Major change is also taking place in the technology field and this has a significant impact on how we engage with customers, what value adds we build into future propositions and the levels of service customers will expect.
We envisage noteworthy changes in consumer attitude and the increased adoption of technology via digital platforms. That means, from the first point of contact that intermediaries and insurers alike will have to be in a position to deal with the future digital customer who will want everything to be done online, from the quotation stage through the lifecycle of the policy, at renewal time and when any further changes are required.
Are we as an industry ready to embrace the move to engage customers through digital means? Similarly, are customers in a position to interact with insurers via digital methodology and what percentage has embraced all the modern technology available to them?
Responding to circumstances
Another pertinent consideration is how intermediaries will or need to respond to the current circumstances. Like insurers, intermediaries have to review their strategies, customer requirements and their operating models. Technology has also had an impact on turnaround times, claim efficiencies and customer demands, thereby increasing interaction with customers and placing more responsibility on the intermediary.
In addition, accelerated progression to digital platforms will pose a threat to some, but to others may be seen as an opportunity to enhance customer service or to do business with new customers.
Recent surveys indicate that industry role players view digital technology as a key driver for change as well as a business imperative. Despite these aspirations, we appear to still be lagging behind in this space and may need to revise how we adapt to rapidly evolving customer demands.
Cultivating product innovation
Considerable transformation has taken place within product portfolios and packages, particularly when it comes to how offerings are structured. Products are being characterised more and more by value added services and, as technology and legislation shape future developments, we could see product definitions and cover changes becoming a necessary part of continuous review and enhancement.
This way, both the needs of commercial and personal customers can be met. It stands to reason that this will require an innovative approach from all industry stakeholders who will have to be aware of, and adapt to, what customers would need to be protected from events and incidents that could affect their financial positions. At the same time, the explosion of social media will most certainly result in service providers having to rethink how they do business and engage their customers, what products they will bring to market and how they should structure themselves.
Opportunities or threats
What does all of this mean for the industry and, particularly, the intermediary servicing the majority of customers in this sector? Ultimately, the customer will decide with whom and where he/she wants to do business and intermediaries will have to decide how swiftly they will adapt to the changing circumstances that will either introduce opportunities or pose a threat to future growth.
