The insurance industry in the US is leading the way for insurers globally. 2015 was the year where technology took over, with insurers focusing on implementing cloud-based claim processing solutions, mobile applications, big data and analytics. These technology trends are expanding globally, but insurers in Africa are especially keen to get on board.
With a large portion of the African population living in rural areas, access to cable services for broadband can be difficult. Mobile masts are logistically easier and cheaper to install, offering mobile services in even the most remote locations. This has induced a mobile first attitude towards technology in the region. In fact, the penetration rate for mobile phones is 70%, whereas the penetration rate for broadband services is only 15%.
Recent Accenture research determined that 85% of South African consumers are most interested in new mobile-enabled insurance services offered by insurers. Mobile devices have expanded the availability of these services to remote locations, with insurers leveraging this technology to reach a wider demographic, offering low-cost policies in a more convenient and personalized manner. There are a number of technological advancements that have made this possible for insurers in Africa:
- Cloud Technology
- Integration of systems and data
- Mobile platforms
The majority of the population have access to mobile phones rather than desktop computers, and we’re not talking smartphones here. Most Africans have basic mobile devices, which will read as text only. These basic phones are more practical in rural areas as battery life can last up to a week, whereas a smartphone may need to be charged multiple times a day!
As discussed in previous blog posts, cloud-based technology is the basis for future technology innovations, enabling both small and large businesses alike through vendor offered solutions. In the past, only large businesses willing to invest large amounts of money in legacy system development had access to modern technology. Legacy systems tend to be cumbersome, outdated and lack the integration capabilities required to adopt new technology. This change has increased the competitiveness of the insurance industry globally, and consumers are beginning to take advantage of this.
Cloud Technology offers insurers the flexibility to integrate multiple systems. This interoperability of data offers a centralized database in which all customer data can be accessed without opening multiple systems, saving time and improving efficiency! The integration of this data offers insurers a better understanding of underwriting and pricing policies, resulting in lower cost policy options. In fact, Instant Life, an African insurer, has taken advantage of cloud-based technology to offer low-cost life insurance policies directly to consumers. Removing the complexity has enabled them to pass on savings of up to 30% to their customers.
Instant Life offers direct distribution to their consumers, allowing them to purchase a life insurance policy in a simple 20-minute process online. This has opened up opportunities for Instant Life in a competitive market.
The next wave for this tech-driven insurer is to improve automation of business processes, offering more personalized pricing and services to build closer customer relationships. This resonates with findings in EY’s 2014 Global Consumer Insurance Survey, finding that customers want more frequent, meaningful and personalized communication with their insurers. This is a good move.
Traditional insurers need to consider these industry developments to ensure they don’t get left behind. To offer consumers the insurance policies, purchasing process and after sales service they are looking for, insurers need to ensure they have the technology to perform in line with their competitors. There are four key points to take away from Instant Life’s approach:
- A centralized database saves time and improves efficiency.
- Integration and automation open up opportunities to offer personalized services to consumers.
- Delivering services directly through the web is vital to reach consumers in rural locations.
- Consumers want more personalized, online interactions with insurers.