SUB CATEGORIES Featured Story |  Straight Talk |  The Stage | 

Growing online capacity will be an industry differentiator

16 September 2015 Jonathan Faurie
John Melville, Executive Head of Risk Services at Santam

John Melville, Executive Head of Risk Services at Santam

One of the main advantages of the internet is its ability to store and collate data. But how are we using this data? Have we considered that this data can play an integral part in our business?

At the recently held Santam Conference, John Melville, Executive Head of Risk Services at Santam, said that data is becoming the cornerstone of the business, which is affirmation that companies and brokers within the insurance industry must disregard the power of the internet at their own peril.

What’s new?

We need to essentially look at the internet in a completely different way. Not only is the internet an effective social and learning tool, it is an effective connection tool. It is a very effective medium for two people to take sets of data and connect them to each other. If we look at the purpose of email, we perhaps get to the core of the issue.

“This holds significant value for the insurance industry as stakeholders have access to important data such as ENatis data, census data, geopolitical data and spending habits of potential clients. This is valuable in that brokers can now offer the right cover for the risks they face and insurers can better price the risk. Brokers can also offer a more effective range of products once they know and are comfortable with the parameters they are working within,” said Melville.

He added that the risks we face as the world changes is real and that we need to refocus our business models to focus on resolving this.

Yes we can

Gielie Matthee, Head of Actuarial at Santam, said if big data can change history, what can it do for your business.

He pointed to an example of how big data changed the political landscape of the world. In 2008, then Senator Barrack Obama was embroiled in a hotly contested presidential race with Republican candidate Senator John McCain. The two candidates were in a dead heat and Obama had to find a way to gain an advantage.

He employed the services of a social media manager who designed an algorithm to predict human behaviour. This collected data of voters from around the country who fell into the undecided category. This data showed where they lived, how many kids they had, and where they shopped. Obama was then able to target specific messages at specific people. The result was that he won the overwhelming majority of the undecided votes and became the first president of colour in the US.  

Matthee pointed out that big data can play a major role in event analysis. The first role is in effective exposure management by proactively optimising and monitoring the risks inherent in certain situations. The second role is an improved underwriting which is a direct result of a proper evaluation of risk. The final role is in targeting where specific messages can be given to customers on the specific risks they face.

The other side of the coin

While the internet has improved the business landscape immeasurably, there is the other side of the coin we need to consider.

With a wealth of information at their fingertips, clients are becoming more educated and more demanding when it comes to advice. Fanus Coetzee, Head of Claims Assessment Services at Santam, warned brokers that they are currently dealing with customers who want things now and who insist on equitable treatment when it comes to products and advice.

If they do not receive this, they have a platform to voice their dissatisfaction in social media platforms. “What we need to remember is that product and price are not key differentiators anymore when it comes to client satisfaction. They want to engage with their broker and made to feel that they are being treated as a key business partner,” said Coetzee.

Editor”s Thoughts:
Dealing with big data is not easy as not everyone knows how to interpret the data they have on hand. However, it does have a growing influence on the industry and will be a key differentiator in the future. Perhaps it is time we follow the route of Obama and have specific people within our organisations who have the necessary skills to grow capacity in these areas. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts

Comment on this post

Email Address*
Security Check *
Quick Polls


How confident are you that insurers treat policyholders fairly, according to the Treating Customers Fairly (TCF) principles?


Very confident, insurers prioritise fair treatment
Somewhat confident, but improvements are needed
Not confident, there are significant issues with fair treatment
fanews magazine
FAnews June 2024 Get the latest issue of FAnews

This month's headlines

Understanding prescription in claims for professional negligence
Climate change… the single biggest risk facing insurers
Insuring the unpredictable: 2024 global election risks
Financial advice crucial as clients’ Life policy premiums rise sharply
Guiding clients through the Two-Pot Retirement System
There is diversification, and true diversification – choose wisely
Decoding the shift in investment patterns
Subscribe now