The evolution of short-term insurers
South Africa has struggled to recover its growth momentum ever since the economic crisis in 2009. It has been five years and the economy continues to stutter, as it stumbles from one crisis to another, says Raimund Snyders, CEO at Mutual & Federal.
Many economic organisations have had to continuously revise their forecasts for SA’s economic growth-down. Consumers have been badly affected by the economic slow-down and as a result of this incomes have been unable to keep up with the cost of living. The insurance industry is one of those sectors that is vulnerable to cost-cutting, as many consumers are try to reduce their expenses.
Mutual & Federal CEO, Raimund Snyders, mentioned that while short-term insurance is often regarded as a grudge purchase, it would be short-sighted for consumers to cancel their insurance policies as the their incomes stagnate and even contract due to tough times.
Innovative solutions
He said that, “an insurance policy is crucial, especially in difficult times as it can eliminate potentially devastating consequences for the family when something unfortunate happens. Therefore, our industry should continue the efforts on consumer financial literacy in order to educate our customers about the value and importance of having the right short-term insurance policy included into their monthly budgets.”
According to Snyders, short-term insurers will need to articulate innovative solutions, in order to balance financial sustainability while meeting individual risk protection requirements. “Products or services will probably have to evolve in order to offer a wider range of solutions, thus allowing clients to customise the cover to their specific needs. Similar to how the medical scheme industry evolved to offer a range of cover solutions to customers,” he said.
In addition, technology will allow the industry to push out business efficiencies to enhance the customer experience. Snyders said, “Technology will play a key role in managing costs and risks. For example, applications like telematics, infrared cameras, lifestyle, procurement and repair management systems will have an ever-increasing influence on the value our industry can add to the lives of our customers.”
Enhanced efficiencies
Combined with the new techniques of data analytics and “big data” (a collection of data from traditional and digital sources in and outside a company that represents a source for ongoing discovery and analysis), these technologies promise to usher in a new era of enhanced efficiencies and cost management.
Technology will not only help the insurer to contain their costs, it can also vastly improve the customer experience, especially during the claims process.
Enhancing customer experience has to be a key focus for insurers as any improvements in a company’s decision-making process needs to be about the collection of more granular information, speeding up the appointment of service providers such as assessors on submitted claims. According to Snyders, technology is not the only solution. Insurers that want to evolve and prosper during these tough times will also need to play a more active role in managing the supply chain, in order to manage costs on behalf of the customers.
He added that, while insurers improve their operations, the industry and government need to come together to create new opportunities of growth in a less risky country.
“Working closer with government to create a safer environment to reduce systemic risks and to ensure sustainable agricultural, small business, mining, infrastructure and manufacturing development is therefore a priority for us,” Snyders concluded.
