Sedick Isaacs, Head: Business Support Services at Bryte
Technology, and the way that it will impact the financial services sector, are currently very hot topics in the industry. Many insurers have been forced to take time to determine what the Fourth Industrial Revolution means for their business and how they can use technology to enhance the customer experience. This is at the heart of this revolution.
The Insurance Institute of Gauteng (IIG) recently held a seminar which focused on the insurer of the future where the role of the intermediary – as the industry’s most valuable player – was highlighted.
Important evolution
Sedick Isaacs, Head: Business Support Services at Bryte, asked if there still a space for intermediaries in an artificial intelligence (AI) driven revolution.
"While 84% of respondents to a recent survey agreed that traditional organisations must evolve and adapt before they are disrupted, we need to have an honest assessment of the value of the intermediary. On the one hand, intermediaries have played a pivotal part in the success of the insurance sector. However, with the rise of technology and its adoption within the industry, many intermediaries are wondering where they fit into this puzzle," said Isaacs.
He pointed out that AI is being used by more insurers to streamline the claims process and provide technical support and guidance.
“Chatbots have become new intermediaries. According to Forbes, over 74% of consumers prefer computer-generated insurance advice and 34% of consumers would like more companies to use chatbots. It is not all doom and gloom for intermediaries; two thirds of consumers from the same survey still want human interaction when dealing with complex claims,” said Isaacs.
He added that the explosion and increased use of technology in the insurance industry has presented new opportunities for intermediaries. Customers will increasingly rely on intermediary partners for guidance and advice about emerging tech solutions and new specialised insurance products.
The intermediary of the future
Having established the relevance and importance of the intermediary within the AI insurance space, we need to understand the intermediary of the future.
“The combined strength of AI and human ingenuity will inform the future intermediary. The future intermediary will be expected to solve complex challenges and assist insurers to develop new products and services,” said Isaacs.
He added that intermediaries of the feuture must be able to:
Interconnectivity
The increasing impact of technology makes it easier for insurers and intermediaries to exist in an interconnected world.
If clients, insurers and intermediaries are moving towards existing in an interconnected world through technology, surely criminals will also be moving their business online. The dangers are obvious. Cyber crime and the business interruption that is associated with it are rated as some of the most important risks in the industry today.
“Using Big Data analysis to mitigate against criminal activities refers to the use of analytics software to highlight trends, patterns, anomalies, and exceptions within data. Data analytics will allow insurers to identify fraud before it becomes material, rule out suspicious transactions, and compare data from diverse sources to identify instances of fraud or non-compliance,” said Isaacs.
A clearer picture
As the industry becomes used to technology, the picture about how it will impact the industry becomes a bit clearer. When this occurs, insurers and intermediaries can strategize and figure out what their place in this world will be.
A word of caution needs to be provided here. Insurers and intermediaries cannot sit back and hope for divine intervention or a eureka moment when it comes to technology adoption. Technology is dynamic and will change rapidly; what’s relevant today may not be relevant in a month’s time. Therefore, flexible business models are needed to become the industry’s MVP.
Secondly, technology adoption will require a significant capital investment in infrastructure and skills development. Legacy systems need to be upgraded or cast aside.
The challenges that insurers and intermediaries face should not deter them from the task at hand. Take heart; if the objective at the end of overcoming this hurdle is better customer outcomes, the sacrifice will be worthwhile.
Like former President Nelson Mandela said It always seems impossible until it’s done.
Editor’s Thoughts:
How are you adapting to the technological demands of an evolving industry? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
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Comments
Added by Jonathan, 23 May 2019Perhaps this is something that the FIA needs to highlight at one of these forums?
it is a major concern. You are right. Report Abuse
FANEWS has always been a huge supporter of the intermediary and believes that the industry has no future without them. This will never change.
Where technology sits within this paradigm remains to be seen. Insurers have to find a way for intermediaries to work alongside technology to benefit the client. Report Abuse
Should intermediaries start commenting on what the insurers of the future will look like?
Intermediaries are good for customers, they stimulate competition in the market, it's the gateway for SMME development in the sector, billions of rands that are entrusted to insurers are raised directly from financial intermediaries. As long as there is a customer with evolving risks, the intermediary will remain integral to the value chain.
Technology will only strengthen the value proposition of the intermediary.
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Good advice will always be in demand, especially in the South African landscape. So why not combine it with technology.
Leave the 'heavy lifting' work for the tech enabled platforms and apps (as in Ctrl's case) and let the complex matters be dealt with by the advisors (humans). This way the client gets the best of both worlds....
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The quote From Mandela is not complete, it should read "It is always possible, by hook or by crook, until it's done" Just my 2 cents opinion Report Abuse