The transformation of the insurance industry

In spite of its reputation as a relatively stagnant industry in terms of innovation, the field of short term insurance has in fact changed vastly over the centuries. Particularly with 21st century technology starting to play a major role in the way the industry shapes itself and delivers its services to their clients, insurance providers have demonstrated that they are, in fact, among the most transformative of industries.

Manus van der Linde, Director of Marketing & Brand at IntegriSure, highlights the changes that insurance providers need to take into account in order to offer the best service to their clients, and how far the industry has come since its initial commercial inception.

Changes in technology that the insurance industry cannot ignore

Insurance sales as a means of securing new clients have seen some major changes. “We have seen a move away from door to door sales and the making of appointments at least weeks in advance – often also requiring loads of paper work to be submitted and collected,” explains van der Linde. “Insurance providers today have moved sales processes to a more seamless activity which can be carried out completely via phone or online.” Indeed, the fact that consumers are constantly online has meant that insurance providers have had to reshape their operations to ensure that they are available for their clients and are able to appeal to potential clients.

Van der Linde notes, “Today, when consumers are looking for a new insurance product, second to getting a referral from a friend, as they can be a trusted source of information based on their personal experience, they are most likely to go online to obtain quotes and compare the different insurance products that are on offer.”

The change or phenomenon largely known as the Internet of Things (IoT), recognises that vast groups of consumers are online consistently, connecting to the internet from a number of devices. In a survey done by IPSOS South Africa, it was identified that of the 34% of South Africans that have access to the internet, 88% of these correspondents said that they use their mobile phones to go online. “We have seen increased emphasis placed on insurance providers ensuring that they are always available to share information on products and services, as well as the ability to respond to client queries as and when they come through,” says van der Linde. “This has fundamentally altered the methods in which insurers reach out to clients, with a primary focus on internet usage and mobile services coming to the fore.”

The insurance industry has to always be on par with consumers’ needs in terms of the tools they use to get quotes, send queries, apply for insurance and submit their claims. This has seen many insurers move from away from just using cold calling, which has since become unlawful, as a means of informing potential clients about their products and services to ensuring that they have functional websites, mass media advertising and a significant social media presence.

Some providers have also started including online elements to their services such as IntegriSure’s Snapquote, a tool which facilitates a fast and easy comparison of price, based on variables. “This is particularly useful as the South African market has shown a major shift towards decisions being driven mainly based on pricing. That being said, we urge consumers to consider other important elements of cover before selecting an insurance provider.” Although many see insurance as a grudge purchase, van der Linde warns that it is important that individuals understand how crucial this form of protection is, and that the correct cover could mean the difference between inconvenience and disaster. “You wouldn’t buy a cheap parachute – in the same vein, cheap insurance options can leave a consumer open to risks, and as such we advise that consumers seek out insurance products based on comprehensive cover and not price alone.”

This increased online focus by insurers has seen increase of online storage of paperwork and data which means that clients are always able to access their policies and refer back to them at any point in time. “This also means that documents are safe and are not easily lost by clients,” van der Linde notes.

Furthermore, historically, client care required a client to go to the offices of the insurance provider in order to receive a service. “Although telephone calls are still a prevalent means of communicating with a service provider, technology now allows users to get real-time on-line assistance,” van der Linde says. This can be done through apps, such as IntegriSure’s App, which allows clients to access vital information relating to their short-term insurance, submit claims online, as well as receive 24/7 assistance. “Apps such as these offer additional services that are beneficial to clients, these allow an insurer to extend their service provision to just insurance services as there is room for some value adds,” says van der Linde.

Another major technological advancement for the insurance industry has been the creation of telematics systems. “These wireless devices are installed on assets and have been mostly used in cars and fleets thus far,” explains van der Linde. “These not only track the location of a car but can also detect speed, airbag deployment and impacts or accidents. This is able to continuously communicate activity from the car to the service provider’s systems, ensuring quick and easy assistance should a client need help.” According to van der Linde, telematics units can store and transmit data related to the acceleration, deceleration (braking) and cornering of vehicles, to establish driver behaviour patterns, which is valuable in terms of understanding and mitigating risks.

“The importance of incorporating technology changes and updates to business systems for players in the insurance arena cannot be underestimated, as is it allows the insurer to provide the best services to their clients,” van der Linde says. “In most cases, technology gives clients direct access to their policies, suppliers and the assistance they need, and facilitate the providing of services that go beyond the basics, giving an insurance provider the competitive advantage in the industry which needs to appeal more and more to their tech savvy clients.”

“The more clients embrace these changes, the more they are able to get the most out of the services offered by their insurance provider,” van der Linde continues. “This also allows insurance providers to focus on their core business of ensuring client satisfaction and offering the best possible policy packages for their clients,” he concludes.