Still to much of a silo mentality in Short term insurance industry
Insurers need horizontal, not vertical view of customers
Short term insurers will increasingly need to focus on their processes and technology if they are to benefit from cutting costs, centralizing certain administrative functions and measuring the performance of their staff in a highly competitive environment.
This is the view of Emile Pepermans, a director at Johannesburg-based business performance improvement firm, Ovations, who also believes that process-driven back offices can enable insurers to have a horizontal rather than a vertical view of their customer profiles.
"There is still too much of a silo mentality in the industry which compartmentalises different lines of insurance rather than enabling a single view of a customer across various business, personal and other insurance lines," says Pepermans.
"By building their processes around customers and their needs, insurers can become much more agile, eradicate unnecessary duplication and become more cost effective and efficient."
While processes and technology were inadequate during the dot.com boom leading to unfulfilled expectations, he believes technology and process functionality is now readily available to improve the way insurers and service providers perform in the financial services industry.
"Technology and processes have now become the enabling factors for companies to be able to re-engineer their internal and back office systems, but there is still a battle to overcome some legacy views," adds Pepermans.
Web-based insurance on the rise
Meanwhile, Pepermans believes there is a rapidly unfolding opportunity for some local insurers to handle a wide range of administrative functions for foreign insurers whose costs are far higher.
"With our infrastructure, low cost base and first world thinking, there is definitely an opportunity to white-label services on behalf of foreign companies. I think this will become a big thing as insurers look to leverage economies of scale off their existing infrastructure which is not being fully utilized by the local market," he adds.
Another trend on the way, says Pepermans, is for insurance to become much more web-based than it is now, following the lead of the banking industry where internet banking has become a dominant factor in transactional banking.
Currently, certain legislative requirements limit the extent to which insurance relationships and transactions can be conducted via the internet, but Pepermans sees this changing as insurers begin to rely more on integrating technology and processes as part of their effort to reduce costs and improve customer service.
"A few years ago, internet banking was on the fringes, now it is absolutely core. I think the same will happen with insurance and many other services which have not yet fully embraced the advantages of technology and processes," says Pepermans.
He also believes that more widespread streamlining of technology and processes will impact substantially on the role of intermediaries, or brokers, who will have to concentrate on adding value to maintain their relevance.
