Welcome to the future
We are so used to a world that is being governed by technology that we have settled into a comfort zone when it comes to technological advancements. None of us can comfortably sit back and say that they can fondly remember a life without mobile phones, let alone smart phones.
We are largely technology adopters, people born into a world where there was no technology to serve the needs that are being served now. However, we are moving forward into the world of the Fourth Industrial Revolution, but what does this mean in our lives?
Rise of the machines
These were the issues discussed at the recent Insurance Institute of South Africa’s (IISA) Motor Forum.
The world of the driverless car is coming. Google is currently developing a driverless car and so are a number of high end car manufacturers who see this as the technology of the future.
Heidi Dias, Head: Claims Transformation at Mutual & Federal, pointed out the reason that car manufacturers are moving towards driverless technology is because of the safety aspects inherent within the technology. If one owns a car that knows when to stop, brake or accelerate within specific situations, it is believed that accidents and road deaths will similarly decrease.
“We cannot ignore this issue. Volvo has announced that it is moving from passive autonomous vehicles (vehicles with limited diver less capabilities) to fully autonomous vehicles. By 2030, the manufacturer aims to only produce driverless cars,” said Dias.
The industry disrupters
As pointed out in the beginning of the newsletter, the majority of us in the industry were born into a world where there was no technology. Because of this, we conducted business in a specific way. Will this ring true for Millennials who are digital natives?
Gerhard Genis, Head: Quality Management and Training at Santam, pointed out that this is a pertinent issue because the current ratio of millennials to Generation Y clients is one to ten, this is likely to be skewed in the future towards Millennials.
“Millennials dictate the conversations these days. They do research before you consult with them; they tell you how they want you to talk to them and even what messages you must give them. How many of us are standing back and asking whether we are really giving these clients what they want?” asked Genis.
It comes down to two aspects: How are you positioning yourself within the industry to facilitate change? And how good are you at embracing technology, because if you don’t embrace technology you become obsolete.
A criminals playground
All of the above industry drivers will have a significant impact on the industry. But with this forward momentum towards a digital world, criminals are hitching a ride.
Autonomous cars, fridges and microwaves that can connect to the internet and talk with you, televisions that know your viewing habits, we are living in an idealistic world right? To a cyber criminal, this is a tempting playground.
Garth de Klerk points out that as much as research and development is driving the world of insurance, it is also driving the world of the cyber criminal. “There are different levels of sophistication when it comes to vehicle fraud. It is frighteningly easy to change an eNatis drivers permit from a Code 4 permit to a Code 2. We are seeing an increased number of cloned vehicles on the road because of this,” said De Klerk.
And this concerns vehicles where drivers are in control of the car. Can you imagine what will happen when a criminal can hack into a car from a wireless network? “We have to be aware that we can spend significant amounts of money on security and the thieves will still find a way to do their jobs,” said De Klerk.
High stakes
We need to come to terms with the fact that we are, at times, involved in an intricately high stakes game of chess where a wrong move by an industry role player will put them on the back foot for considerable lengths of time.
We need to adapt in order to survive. Dias pointed out that there are international insurance pricing models where insurers go onto forums such as Hello Peter to find out why people are disgruntled with their insurer, the insurer prospecting for business can then offer these disgruntled clients products that resolve this disgruntlement. There is also an international model where clients form networks (much like those found in umbrella funds) where the risk is spread among a set number of policyholders. The insurer in essence then just has to cover the risk shortfall that the group cannot cover.
Genis concluded his presentation by pointing out that as technology develops, the paradigms within the industry will be challenged. We have to look at long-term insurance models and make decisions about the future.
Editor’s Thoughts:
We cannot be passive passengers when this change happens. We need to get on the innovation wave or become obsolete. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
