Only dinosaurs are too old for the digital age

The world is changing at a rapid rate and one of the main drivers behind this change is technology.

Technology, on a global scale, is altering the game; not only in the insurance industry but also in numerous other industries.

An enabler or disrupter?

Uber, for example, is the largest taxi business in the world, yet they do not own a single taxi. This is how the seemingly impossible becomes possible. Where technology serves as an enabler that disrupts industries and the long-term insurance industry is no exception.

This is not to say that financial advisers will become obsolete; on the contrary, financial advice remains crucial in ensuring clients become financially well. It is now becoming more about how we can use technology to enhance our industry.

Is digital the new black?

With this in mind, we cannot assume that it is only the younger generations who prefer to utilise technologies such as Facebook or WhatsApp as primary communication tools.
A recent report that was released by PwC Wealth Management states that about 70 per cent of High-Net-Worth Individuals (HNWI) in South Africa prefer to engage with their wealth managers in a digital format.

Although the report only focusses on the communication preferences of HNWIs in the wealth sector, it does provide valuable insights that can be applied to the upper income sector with regards to other products like life insurance products. This is because both the investment and long-term insurance sectors are relatively ‘poor’ in tech literacy and slow when it comes to the implementation of technology platforms that allow clients to engage with financial advisers and the industry.

Also, there are a lot of murky assumptions that exist in the insurance and the investment sectors when it comes to client engagement preferences.

Getting our wires crossed

One such incorrect perception, which the report highlights, includes the assumption that HNWI clients prefer to only have face-to-face interactions with their wealth managers.

When it comes to big investments, clients do prefer direct engagement but thereafter, they are very happy to use online facilities for more routine things. In fact, clients expect an “Omni-channel approach” where they are able to interact via a number of channels, as they choose.

Another outdated perception was that older HNWI clients are less ‘tech savvy’ but the PwC report indicates that there are 50 and 60 year olds who are comfortable using technology such as online and mobile devices. Those below 45 years are more interested in managing their investments online and 47 per cent of this age group are open to explore new technologies such as robo-services.

The report also states that 70 per cent of clients prefer an online portal or gateway to their wealth managers and 60 per cent wants to use a digital platform to communicate with their advisers.

This is in line with research from the Reinsurance Group of America (RGA) which indicates that every year, two billion people globally access the internet via a smart phone and 42 per cent of all mobile users make payments on their devices. This means that insurance clients are going mobile too. Although our clients in the upper market do not necessarily want to purchase their risk cover via this type of technology, they would expect other service offerings to be available via theses platforms.

Opportunity comes knocking

It then becomes vitally important to keep track of client needs and accommodate their requirements by looking at ways to incorporate new technologies that can automate certain business operations.

By doing this, service delivery becomes much more efficient and ultimately technology can go a long way to create holistic solutions that can satisfy unique client needs, instantly.