The future is now, adopt tech or bow out
The fast-paced adoption of emerging technologies continues to reshape the global insurance and insurance broking landscapes. Each innovation helps insurers and reinsurers to underwrite sustainably while improving the overall customer experience. AI-driven risk assessment tools, automated claims management, digital platforms and online insurance placement ‘walk throughs’ are among the myriad tech-backed initiatives that make brokers’ and risk managers’ roles easier.
Too many tech talks to remember
Your writer has lost track of how many technology focused presentations and webinars he has attended over the last decade or so. Suffice to say, there is at least one innovation slot on every insurance programme, with the range of topics covered limited only by the imagination of the of presenter. The most recent writer-meets-tech incident came courtesy Marcia Le Roux, Corporate Brand and Relations: Africa at SSP Limited, who presented to the Insure Talk 47 event, fortuitously themed ‘Protecting futures: embracing innovation in the insurance industry’.
Le Roux delved into the role of software platforms in advancing innovation and delivering a more sustainable insurance industry for all stakeholders. “Artificial intelligence (AI); cloud adoption; data driven decision making; digital transformation; and personalised customer experiences are no longer mere buzzwords, they are the tools driving the future of insurance,” she said. These and other technologies are helping insurers and insurance brokers meet tough regulatory demands, build resilient businesses and prosper in the competitive risk management world.
Insurers’ hesitance to migrate from legacy systems was flagged as a key constraint to agility and innovation. “Too many insurers are still using outdated legacy systems which hold back innovation; by transitioning to digital platforms, they can streamline their operations,” Le Roux said. The benefits of dumping old systems include cost and transactional efficiencies; enhanced customer experiences; and improvements to the bottom line.
The first step to triple-tech integrations
Digitalisation is an important first step towards the seamless integration of technologies like AI, Internet of Things (IoT) and the cloud. “Imagine using AI and IoT data in real time to optimise underwriting and drive down costs; that is where the insurance industry is heading,” the presenter said. Additional comment on cloud-based platforms is warranted: they enable the dynamic management and storage of data, giving insurers real-time access to the vast information resources essential for claims processing, client servicing and risk pricing.
According to Le Roux, digital platforms help insurers to set up scalable infrastructures which in turn enables them to adapt quickly to market changes and shifting customer expectations. “Cloud adoption means insurers can avoid the challenges and costs associated with maintaining extensive and expensive in-house systems; making these solutions a powerful tool for flexibility and efficiency,” she said. The talk was somewhat insurer-centric; but FAnews readers will appreciate that efficiency ‘wins’ at the insurer level usually filter down to brokers, commercial risk managers and insureds too.
Automation has become a baseline requirement for competitive participation in process-intensive areas of non-life insurance. According to the presenter, the next differentiator in the competitive underwriting market centres around data-driven decision making and predictive analytics. Those insurers who excel in this area will stand out from the crowd, delivering best-in-market solutions to their brokers and insureds.
Machines for fraud detection
“Predictive analytics is revolutionising how insurers assess risk and detect fraud, [and] Africa-based insurers are already leveraging AI and machine learning to get these type of insights,” Le Roux said. Additionally, AI tools are making inroads in tackling the age-old retention challenge. The presenter pointed out that these tools were increasingly being used to analyse customer behaviour to suggest personalised product offerings, enhance customer satisfaction and reinforce brand loyalty.
Insurers that integrate predictive analytics into their operations are reporting significant improvements in claims processing times and underwriting accuracy too. Phrased differently, excelling at data analysis can save costs and deliver efficiencies across the value chain. If used correctly, AI tools will enable the personalisation and self-service that underpin enhanced customer experiences. The presenter offered one example: “Insurers are using digital platforms to allow customers to manage their accounts online, adding convenience and transparency.” More broadly, mobile apps and self-service portals are gaining traction industry-wide.
Another tech-enabled trend is the push into so-called embedded insurance solutions. This approach integrates insurance products directly into the purchase of goods or services, making coverage seamless and accessible without a separate transaction. For example, a travel booking site might offer trip cancellation insurance at checkout, allowing customers to add coverage in one click. This makes insurance convenient, relevant to the context, and increases uptake by embedding it into an everyday transaction.
Cyber security concerns on the rise
A discussion about insurer platforms and systems is incomplete without considering the cyber security angle. Insurers and insurance brokers were encouraged to conduct regular security audits and ensure that data encryption and multi-factor authentication featured in their digital solutions. “Insurers are investing in cyber security to protect sensitive customer data and ensure compliance; this is an ongoing trend and an important focal point,” Le Roux said. The protection of customer data is strictly enforced under the Protection of Personal Information Act (POPIA). It is also a key requirement in the pending Conduct of Financial Institutions (COFI) legislation.
The presentation zipped through a few insurance-related benefits from technology adoption, starting with how automation is transforming claims processing, making it faster and more accurate. Meanwhile, in underwriting, AI provides real time risk assessments, which results in more precise and valid decision making when placing new business or negotiating renewals. “Some insurers have seen significant reductions in claims processing times using a combination of AI and automation, as well as improved underwriting accuracy,” Le Roux explained.
The discussion closed by reflecting on future tech applications in insurance and insurance broking. According to the presenter, the ongoing success of the insurance industry hinges on how well it can leverage cutting edge technology and data to anticipate risks, offer personalised services, and safeguard clients in a rapidly evolving environment. To stand out from the crowd requires leveraging technology to improve efficiencies; enable scale; strengthen risk management; and take the customer experience to the next level through personalisation.
Taking your business ‘next level’
“Those who harness technology innovations will be well-positioned to thrive into the future; by integrating advanced software platforms [insurers and insurance brokers] can not only meet regulatory demands but lead the way in customer experience, operational efficiency and risk management,” Le Roux concluded. “Technology is reshaping the insurance landscape; insurers must embrace change to stay competitive and protect their clients and businesses into the future.”
Writer’s thoughts:
The rapid pace of technology development and adoption risks leaving smaller insurance brokerages behind. Are SA’s insurers doing enough to help smaller brokerages implement technology? And does an insurer-centric tech environment introduce unanticipated risks? Please comment below, interact with us on X at @fanews_online or email us your thoughts editor@fanews.co.za.
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