TIC 2017: Time is of the essence in the industry
FAnews is reporting live from the 2017 Insurance Institute of South Africa (IISA) Conference at Sun City where a major topic on the first day of the conference was digital disruption and how it is changing business models.
We know that our models will be disrupted by technology, but are we aware of the extent of this disruption and are we prepared for it?
The way we see it now
Opening the conference, Oliver Bäte – Chief Executive Officer (CEO) of Allianz SE – said that we need to forget that insurance is an industry that is 127 years old because the way clients are engaging with the industry now is vastly different than in the past.
Technology has changed the way clients want to be treated. They want products and services to be offered in a very specific way and they want instant gratification. Bäte drew comparisons with Amazon Prime in Europe where if you order a product before 10 am in the morning, you can expect same day delivery.
“Clients want the offerings from the insurance industry to be easy and simple, they do not want it to be complicated and they do not want to wait for it to happen over long time frames,” said Bäte.
Moving up the curve
Traditionally, many people thought that South Africa was behind the curve when it comes to innovation and participation in the Fourth Industrial Revolution. However, international companies are not seeing this and are bullishly optimistic on the opportunities that Africa has to offer.
“In today’s fast changing world, it is critical to innovate quickly and to change course rapidly if necessary. The insurance industry, like other customer service industries, is transforming because of the all-encompassing impact of digitalization on our lives. Customers have new expectations, a growing number of disruptors are taking the stage and new megatrends – such as Artificial Intelligence (AI), voice-based smart assistants (i.e. ‘Alexa’), telematics, wearables and drones – are fundamentally changing the traditional insurance model,” said Bäte.
He added that digital adoption comes naturally to Africans. “While traditional markets, such as Europe, are struggling with their digital transformation process, Africa is digital by nature. Mobile is the fastest growing sector and innovation enabler on the continent with an expected 1.2 billion African subscribers by 2018. By leveraging the internet and mobile penetration, African countries can leapfrog innovation. African customers will rightfully demand and drive insurance innovation in Africa as they expect offerings and channels to be fully digitalized,” said Bäte.
Be aware of the changing world
If ever we were in doubt as to how rapidly technology will influence business models, Bäte put this debate to bed, or he sounded ever increasing alarm bells. “The technological revolution is here and it will come at us at full force,” said Bäte.
This sentiment was echoed by the second speaker at the conference. Achim Klennert, Managing Director of Hannover Re South Africa pointed out that one just needs to consider the current workforce. The majority of workers in the world today are Millennials who are digital natives. They were born into a world where information is freely available and can be accessed at the click of a button.
Are we innovative?
A recurring theme on the first day was that complacency is nobody’s friend. We need to innovate and we need to innovate now.
“Can we continue to do what we have done in the past, or do we need to change? Are we reinventing ourselves quick enough for our clients?” asked Thomas Barenthein, Managing Director of Hannover Re Scandinavia. He said that digital natives have taken over the world and that the days of slow digital immigrants are coming to an end. We need to adapt quickly and rapidly.
The role of the broker
Speaking with some of the attendees at the conference, there was some debate as to the future role of the broker in the market. While many attendees agreed that adoption needs to be rapid, they reiterated the important role that brokers play in the market; specifically when it comes to risk and risk management.
FAnews conducted a few key interviews at the conference which are available on our YouTube channel. There are some key insights into digital disruption and appropriate responses to it.
Editor’s Thoughts:
The industry is no longer complacent about the role that technology is playing in the industry. What I do think is an issue is that some companies are more flexible than others and are adapting quicker. And time is a major issue when it comes to changing business models appropriately. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
Ends
