Rolling the dice with technological advancements
Technology has been a major talking point in the insurance industry over the past two years. Advancements in this space have made insurers, and advisers, sit down and reassess their business models to figure out whether they are appropriate for a technologically driven industry. We have seen the impact that technological advancements have had internationally. But is South Africa keeping up with these advancements or are we falling behind? FAnews spoke to Liberty and Discovery to find out their views on the subject.
A place in this world
There is no doubt that this technological advancement will change the face of the industry as we know it. The insurance industry around the world needs to come to terms with the fact that business cannot be done in the same way as it has been done in the past.
Where does this leave us? Is South Africa keeping pace with the change experienced around the world?
“In some ways, South Africa is still a bit behind the curve when it comes to the pace of change globally. However, we saw a similar situation with our banks in the past and they caught up very quickly. Is South Africa behind when it comes to technological change? Possibly. Will it take long for us to catch up? No; within two or three years we will have caught up with international markets,” said Benjamin Marais, Group Information Officer at Liberty.
Johan Minnie, Group Executive: Liberty Group Distribution, said that the reason why South Africa will catch up at a rapid pace is that the local insurance industry has already got technological complexities built into businesses. This will put us in good stead in the future.
Contrary thinking
Gareth Friedlander, Head of Research and Development at Discovery Life, disagrees saying that South Africa is taking its rightful place in the world when it comes to technological development.
“The South African life insurance market has a well-earned reputation of being one of the most progressive insurance markets in the world. We are often seen as the hub for product innovation within the life insurance space. Critical illness is but one South African product innovation which was transported to markets across the world,” said Friedlander.
Trail blazing
While there is a debate as to whether South Africa is behind the curve when it comes to technological advancements, South Africa is ahead of the game in other aspects.
Minnie points out that South Africa is very advanced when it comes to loyalty programmes offered by insurers. While in an ideal world, policyholders will purchase insurance products based purely on the benefits that the product offers, the reality is that clients are attracted to loyalty programmes and may be swayed to purchase a product because of the offerings of these programmes.
“In this case, South Africa is unique. Loyalty programmes are common place in Africa and South East Asia where insurers offer benefits that insurers from around the world don’t offer,” said Minnie.
Look to the future
One of the technologies that has made its presence felt within the industry is Blockchain.
When dealing with this industry disrupter, Marais said that we need to look at what Blockchain can do in the future and not at what it is currently doing.
“I think that Blockchain is an amazing piece of technology and that the concept of the Blockchain platform is very powerful. It provides companies with a platform and we have seen that platform businesses are the businesses of the future. A perfect example of this is Uber which used its platform to create Uber Eats which offers an additional service off the same platform,” said Marais.
He added that if used correctly, Blockchain can unlock massive potential within the insurance industry.
Fighting inefficiencies
Friedlander agrees. He added that the value of Blockchain cannot be underestimated.
“Blockchain could potentially supplement the startups within our industry and allow existing insurers to act as administrators rather than custodians of the data collected through transactions. There is also potential to use Blockchain to create transparency and efficiency through the distributed ledger technology offered through the technology; particularly when it comes to claims processes and contracts,” said Friedlander.
He added that with such a large, decentralised database, Blockchain has the potential to increase fraud detection. However, it is also known to be a means to circumvent many regulations.
Editor’s Thoughts:
Technology is having a big impact on the life insurance industry, and South Africa needs to take its place when it comes to the adoption of cutting edge technology. What roles does the adviser play in this? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za
