Disrupting Africa's insurance industry
Disruption, once a word used to describe bad behaviour, has now been turned into a revolutionary means of changing the way business is being conducted today with advancement of technology and ability to use innovate new business models. Insurance is not exempt from this disruption and, in fact, we are seeing a very clear shift away from traditional means of insurance towards the newer, more evolved methods necessary for maintaining pace in a fast changing, always-on and connected world.
There are typically four main aspects of insurance: product design, pricing and underwriting, distribution and admin, and claims management. This model has been the same for decades and, despite of the increase in product complexity, the insurance business is essentially relying on policy premium income and asset management to function. However, the rise of disruptive technologies, changed customer mind set is changing this model, and insurance companies are forced to change from product centric model to customer centric approach.
Insurers are moving towards customised, usage based, real time coverage models and moving away from risk based underwriting approach to risk management approach. From the beginning insurance companies have captured lot of data and advancements in big data and analytics helping insurers in right risk selection, enabling more accuracy than ever before. Legacy interaction methods and distribution channels using call centres and one-on-one visits are being replaced anywhere any-time response to customers is taking top priority. The ‘virtual technology’ is providing easier and instantaneous ways for clients and insurers to obtain and update information, even enabling seamless and accurate billing via mobile applications.
Emerging digital trends in insurance
There are several trends currently disrupting the insurance industry across the globe, many of which are either technology related or technology driven, which are enabling insurance companies to remain relevant and competitive. African insurance companies are following suit and embracing many of these global trends in the face of a challenging and complex market environment.
Some of the key trends that have been identified are an increased use of Internet of Things (IoT) by insurance companies, the use of big data to improve claims processing, an increasing demand on cyber insurance, the emergence of peer-to-peer insurance, and a growing focus on mobile applications for interaction between insurers and their customers.
Today’s customer uses the internet to source quotes and research insurance companies to check for the best deals, yet research shows that most insurance purchases are still happening telephonically or through in-person interaction. Insurers are coming around to the fact that customers prefer online interaction, and are realising the need to adapt their systems accordingly. We will be seeing the progressive simplification of legacy systems to remove the barriers that hinder them from offering a consistent and seamless customer experience.
As the trend for connected and smart devices continues to grow, IoT is fast becoming a transformational driver in insurance industry. Several auto insurers have implemented new models based on vehicle telematics. The possible applications of connected devices across the industry are extensive and have the potential to revolutionise claims processing, product pricing and fraud detection. Auto insurance industry still worried about the future of insurance connected cars and driverless cars as the manufacturing advancements are going to reduce the risk and thereby premiums for insurers. Industry predicts that Auto insurance premiums will go down significantly in the next 10 years due to customer behaviour changes and manufacturing advancements in the industry.
Virtual adoption across the insurance industry has also been vast, and many insurers are actively using or implementing virtual computing for operational flexibility, function standardisation, cost savings, scalability and business agility. Small to mid-market insurers have been seen as early adopters of virtual computing services, which is enabling the ability to deliver faster claims, policy and billing services.
Insurers are facing an all-time low retention rate, backed by growing customer demand and rising concerns about cyber-crime. By not capturing and extracting data accurately, insurers are not able to assess their business positioning and the associated business risks fully, including security breaches. Insurers are being forced to make operational changes which will enable them to make better use of their data, for the purpose of retaining business and staying ahead.
Traditionally insurance is sold more than bought. With advancement in technology customers have multiple options and they are demanding changes in the behaviour of insurers to have multiple touch points now compared to the past. Insurers are migrating and upgrading their legacy systems, by automating and digitising core systems. Insurers are seeing the benefits of improved efficiency and customer interaction at multiple touch points. Legacy system transformation has been slow in Africa due to perceived high costs and lengthy implementation timelines. However, many are quickly realising that the longer they wait, the more customers they risk losing, adding to their lag behind competitors.
Insurance companies are embracing these trends and looking at more innovative ways they can attract and maintain customer retention. They are remaining up to date and very interactive with what is happening, even exploring radical game changing technology such as the blockchain.
Disruptive technology is creating new insurance services
With the advent of technologies like IoT, we are seeing an emergence of new services. Connected home technologies are enabling people to stay in touch with things like their home security systems, which is reducing risk for insurers who offer home insurance. Wearable technology is enabling health insurers to keep real-time tabs on the health and wellbeing of their customers, again mitigating risk.
We are seeing the biggest impact in the use of big data, though. Insurers are discovering the multiple benefits that the wealth of information available from sources such as social media is delivering. Using this information, they are able to tailor their products based on customer preferences and even offer customised rewards programs, increasing sales and customer retention significantly. It is also enabling easier and more streamlined claims processing, as information is recorded, and centrally stored and accessed.
Of course, the mobile trend, particularly in Africa, is making possible the use of apps, not only to smooth insurer and customer interaction, but also to track things like customer fitness, health and even wealth status. Applications are opening up a world of possibility for insurers everywhere.
Insurance in Africa vs the World
In South Africa, lot of importance is placed on things like life insurance, private medical aid car insurance. The rest of Africa, however, sees insurance as less necessary. This means that insurers who operate in Africa need to be more agile, identifying ways in which they can appeal to the African market and delivering them with speed.
Quick, easy, instant, flexible Insurance is very attractive to the African market. An example of such an initiative is currently being investigated by a South African Insurer who is moving into the Nigerian market. They identified a need for taxi drivers to have medical and insurance cover specifically for while they are in transit. Taxi drivers will be able to purchase insurance making use of USSID or a smart phone application enabling cover only for the time that they are travelling from collection point to destination – an attractive and cost effective proposition for the transport business
This is just one of the many ways in which insurance is changing and being impacted by technology. Insurers, typically entrenched in tradition thanks to its association with stability and reliability, do need to realise that the market has changed. It’s time to embrace technology and disrupt the way insurance works for longevity.
Jaqueline Van Eeden is the Insurance Head of Wipro Limited, South Africa. Wipro Ltd is a global information technology, consulting and outsourcing company .
Automation of repetitive tasks leads to higher value work
Two-thirds of global office workers feel they are constantly doing the same tasks over and over again. That’s according to a new study (2021 Office Worker Survey) from automation software company UiPath.
Whether emailing, inputting data, or scheduling calls and meetings, the majority of those surveyed said they waste on average four and a half hours a week on time-consuming tasks that they think could be automated.
Not only is the undertaking of such repetitious and mundane tasks a waste of time for employees, and therefore for businesses, but it can also have a negative impact on employees’ motivation and productivity. And the research backs this up with more than half (58%) of those surveyed saying that undertaking such repetitive tasks doesn’t allow them to be as creative as they’d like to be.
“When repetitive, unrewarding tasks are handled by people, it takes time and this can cause delays and reduce both employee and customer satisfaction,” Gavin Mee, Managing Director of UiPath Northern Europe tells Business Chief. “Repetitive tasks can also be tedious, which often leads to stress and an increased likelihood to leave a job.”
And these tasks exist at all levels within an organisation, right up to executive level, where there are “small daily tasks that can be automated, such as scheduling, logging onto systems and creating reports”, adds Mee.
Automation can free employees to focus on higher value work
By automating some or all of these repetitive tasks, employees at whatever level of the organisation are freed up to focus on meaningful work that is creative, collaborative and strategic, something that will not only help them feel more engaged, but also benefit the organisation.
“Automation can free people to do more engaging, rewarding and higher value work,” says Mee, highlighting that 68% of global workers believe automation will make them more productive and 60% of executives agree that automation will enable people to focus on more strategic work. “Importantly, 57% of executives also say that automation increases employee engagement, all important factors to achieving business objectives.”
These aren’t the only benefits, however. One of the problems with employees doing some of these repetitive tasks manually is that “people are fallible and make mistakes”, says Mee, whereas automation boosts accuracy and reduces manual errors by 57%, according to Forrester Research. Compliance is also improved, according to 92% of global organisations.
Repetitive tasks that can be automated
Any repetitive process can be automated, Mee explains, from paying invoices to dealing with enquiries, or authorising documents and managing insurance claims. “The process will vary from business to business, but office workers have identified and created software robots to assist with thousands of common tasks they want automated.”
These include inputting data or creating data sets, a time-consuming task that 59% of those surveyed globally said was the task they would most like to automate, with scheduling of calls and meetings (57%) and sending template or reminder emails (60%) also top of the automation list. Far fewer believed, however, that tasks such as liaising with their team or customers could be automated, illustrating the higher value of such tasks.
“By employing software robots to undertake such tasks, they can be handled much more quickly,” adds Mee pointing to OTP Bank Romania, which during the pandemic used an automation to process requests to postpone bank loan instalments. “This reduced the processing time of a single request from 10 minutes to 20 seconds, allowing the bank to cope with a 125% increase in the number of calls received by call centre agents.”
Mee says: “Automation accelerates digital transformation, according to 63% of global executives. It also drives major cost savings and improves business metrics, and because software robots can ramp-up quickly to meet spikes in demand, it improves resilience.
Five business areas that can be automated
Mee outlines five business areas where automation can really make a difference.
- Contact centres Whether a customer seeks help online, in-store or with an agent, the entire customer service journey can be automated – from initial interaction to reaching a satisfying outcome
- Finance and accounting Automation enables firms to manage tasks such as invoice processing, ensuring accuracy and preventing mistakes
- Human resources Automations can be used across the HR team to manage things like payroll, assessing job candidates, and on-boarding
- IT IT teams are often swamped in daily activity like on-boarding or off-boarding employees. Deploying virtual machines, provisioning, configuring, and maintaining infrastructure. These tasks are ideal for automation
- Legal There are many important administrative tasks undertaken by legal teams that can be automated. Often, legal professionals are creating their own robots to help them manage this work. In legal and compliance processes, that means attorneys and paralegals can respond more quickly to increasing demands from clients and internal stakeholders. Robots don’t store data, and the data they use is encrypted in transit and at rest, which improves risk profiling and compliance.
“To embark on an automation journey, organisations need to create a Centre of Excellence in which technical expertise is fostered,” explains Mee. “This group of experts can begin automating processes quickly to show return on investment and gain buy-in. This effort leads to greater interest from within the organisation, which often kick-starts a strategic focus on embedding automation.”