Turn a blind eye and shoot yourself in the foot

15 June 2016 Jonathan Faurie
FedGroup Business Development Manager Jeanetta Hendricks

FedGroup Business Development Manager Jeanetta Hendricks

The insurance industry is currently going through a lot of change. Some of this change is the result of the current regulatory reform that the Financial Services Board (FSB) is implementing, while the bulk of the remaining changes in the industry follow the trends set by the current Fourth Industrial Revolution (the adoption of technology in our daily lives).

Some companies and advisers are struggling to keep pace with the change that has been set. The FSB has set target dates for the implementation and adherence to principles outlined in its Treating Customers Fairly (TCF) and Retail Distribution Review (RDR) programmes. Added to this is the uncertainty about the best way to incorporate technology into businesses models.

But what if technology can help achieve TCF objectives? FAnews spoke to FedGroup Business Development Manager Jeanetta Hendricks on the company’s experiences in this aspect.

Big Data player

One of the features of the Fourth Industrial Revolution is that Big Data will play a major role in the successful integration of technology into the corporate world.

This is especially applicable in the financial services industry where client management is key. “Companies need to find a way to track the progress of claims from the time they are logged until they are settled. In this way, you know where your strengths and your weaknesses lie; and it is with that information that you can effectively improve your business model,” says Hendricks.

FedGroup recently acquired a technology programme which allows the company to track claims all through the process. Relevant information relating to the claim is presented to managers within FedGroup on a dashboard which shows where the claim is sitting and any potential bottlenecks in the claims management process.

By using this system, managers can sit down with underwriters to figure out how best to resolve these bottlenecks.

Singing of the same song sheet

Having this information on hand also allows all players in the process to sing off the same song sheet.

“Our experience is that this type of information also motivates staff members who are not management to sit down and help others who are struggling with certain aspects of the claim. There is a significant buy in element when it comes to technology. Workers feel as if they have an increased sense of responsibility,” says Hendricks.

And the effects show. With a staff compliment of 20 people (which includes management), Hendricks’ department is responsible for assets under management (AUM) to the tune of R3.5 billion.

The true benefit

Hendricks is quick to sing the praises of technology and adds that it is one of the major reasons that FedGroup is able to effectively manage its AUM.

There are also other benefits. Because FedGroup is a company that manages the funds for beneficiaries of investments and life insurance policies, the company will naturally field a lot of calls from the beneficiaries of these funds who want to track the progress of their claim. Hendricks points out that in a four month period, the company was able to reduce the number of fielded phone calls from 500 calls per day to 100 calls per day.

It also helps manage fraud. By keeping a historical record of data, companies can see who the regular claimers are and what they are claiming for. Disclosure and non-disclosure is easier to identify.

It allows companies to intimately understand their business and what needs to be done to improve client interaction. The benefit of technology is that it understands clients across all of the touch points of the claim interaction. Further, it allows companies to tailor make messages that helps them understand what stage the claim is at.

The bottom line

One of the major deterrents about technology is that not only are companies unsure about how to effectively integrate technology into their business, but they are also unsure if they are prepared to bear the costs of incorporating a potential costly technology system into their business.

Hendricks says that while FedGroup is not yet in a position to make a definitive call regarding the financial impact of adopting the technology system, there has been no regrets from FedGroups side. “The return on investment is there. To be able to effectively manage the expectations of clients is priceless for any business. Companies in this industry have a duty to deliver on promises that are made to clients; this principle is inherent in TCF and is good business practice,” says Hendricks. 

Editor’s Thoughts:
While there is an element of uncertainty surrounding technology. Companies and advisers can no longer look at it as a disruptive force. Warren Buffet once said, “Chains of habit are too light to be felt until they are too heavy to be broken.” Can we honestly say that we can do business today the same way we did it 10 or 15 years ago and remain profitable? Can we really ignore technology? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].

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