Become the trendsetters of the financial services industry
As the industry becomes increasingly influenced by technology, InsureTech is starting to become the industry’s next big thing.
As with all things technology, the sooner a company adapts, the better it will be for them. While adapting to technological changes can be challenging, there are reports that the South African insurance industry are slow adopters when it comes to this.
FAnews spoke to Alex Thompson and Sumarie Greybe, who jointly found Naked Insurance, to find out their thoughts about the future of the industry.
Slowly catching up
Technology is changing every facet of our lives and has had a significant impact on the financial services industry outside of insurance. “However, the insurance industry is catching up, said Thompson.
The problem with the insurance industry is that the industry is operating off systems that were developed 20 years ago and are unable to meet the current demands of a technology rich industry.
Thompson added that insurers are either running systems that work through brokers or work through call centres. The problem is that when an insurer wants to develop a product that is purely web-based, many companies do not have the technological tools/skills to facilitate this.
Moving with change
It is undeniable that the industry is moving towards more web based insurance options where the policyholder can exercise greater levels of control over the products they purchase or the services that they access.
This may leave some brokers at a loose end if they do not adapt to this change. “Brokers need to look at the way that they deliver their messages to clients. If policyholders want more control over the products they are purchasing, the role of the broker becomes more like that of a risk adviser. At the end of the day, there will always be a space for brokers because some people simply want to deal with them,” said Thompson.
Fear Mongering
One of the criticisms of the growth of technology is that companies are mostly unsure of how it will personally affect them. Because of this, companies prefer to adopt a wait and see approach when it comes to technology adoption.
“This is a problem,” said Greybe, “companies are good at making big bets which affect their profitability. However, when it comes to making bets on what their future will be, companies struggle to find the right horse to place their money on.”
Greybe added that companies are realising that adopting a head in the sand approach is not beneficial to anyone. “Companies are now putting a lot of money into seed funding to help develop companies that focus specifically on InsureTech and developing options that will benefit companies,” said Greybe.
How insurers work with InsureTechs in the future will greatly influence the way the industry progresses in the future.
Pertinent changes
While InsureTech will mostly affect insurers, there are some brokerages that will get affected. “Any large brokerage that acts as a mandated intermediary performs similar actions and tasks as an insurer. InsureTech will help them develop systems that will help them online products and services that will benefit policyholders,” said Greybe.
“The questions regarding the future role of the broker is a good one and is a question that many affected parties will have to sit and answer. The role of the broker will go through some significant changes as InsureTech gains momentum. Brokers that embrace InsureTech will be industry trend setters,” said Thompson.
Editor’s Thoughts:
Financing a place in a world that is being defined by technology is not easy. However, while managing this will be challenging, it cannot be ignored. InsureTech is here, how should we respond? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
