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Profiling the intermediary of the future

22 May 2019 Jonathan Faurie
Sedick Isaacs, Head: Business Support Services at Bryte

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:

  • secure best prices;
  • identify risks to advise properly;
  • take advantage of machine learning to personalise the cover of the customer; and
  • promote a customer centric approach and enhance the customer experience. 

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.

Comments

Added by Jonathan, 23 May 2019
@ Lizelle

Perhaps this is something that the FIA needs to highlight at one of these forums?

it is a major concern. You are right.
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Added by Lizelle, 23 May 2019
I agree Jonathan. My real concern is how we see technology as an enabler. It's not about the role players - intermediaries target a specific customer segment and this will take care of itself over time. As an industry, we need to question our relevance to the majority of south africans who are poor - insurance products and services have remained the same over decades. How do we use technology to open this market to help ordinary south africans to protect themselves from inevitable risks that we face every day. It's frustrating for me personally to read about reinventing what we already have, why not collaborate to find new solutions for what we don't have?
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Added by Jonathan, 23 May 2019
@ Lizelle

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.
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Added by Lizelle, 22 May 2019
It's interesting when insurers talk about what the future of the intermediary will be. Have they ever been a broker?

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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Added by Pieter Erasmus , 22 May 2019
Thank you Sedick for the article. We at Ctrl (www.ctrl.co.za) can only agree.

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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Added by Humphrey, 22 May 2019
i just wonder where we are going to land up from an unemployment rate one day and the consequences of this (more crime, lower tax base = higher taxes for those that are still working). When i joined the then M & F in East London in 1985 they had in excess of 90 staff. Now i think they have a small number like 5 or something like this. Yes they may have a large central call centre but with AI etc. that too will disappear. Other industries are similarly reducing numbers and entire businesses are disappearing (Drive-in theatres gone, Video rental shops largely gone, CD/Music shops largely gone, large chunks of the retail market disappearing with increasing online purchases, vehicle manufacturers largely automate the manufacture process through robotics etc.). Yet population growth rates continue to grow - particularly in Africa. This is all due to the "ion" effect - computerizatION, mechanizatION, centralizatION (call centres) and increasingly RegulatION, the latter that is causing mergers and people exiting industry due to regulatory cost factors and quite frankly a lack of job enjoyment in having to deal with bureaucratic, non-productive mind numbingly boring stuff. All very worrying indeed.
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Added by Andre, 22 May 2019
It seems the big companies are going to hide behind technology to get rid of intermediaries I honestly cannot see anybody going into the industry to make a career of it......intermediary's is a dying breed that will dearly be missed in the future...
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
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