Four ways big data will reshape insurance in South Africa
For insurance players, big data isn’t merely about having a more detailed profile of the customer and sharpening their management models.
It gives insurers the opportunity to re-imagine the very nature of insurance, add greater value to customers, and become ‘trusted partners’ (i.e. offering guidance on minimising risks, saving costs and leading healthier, safer lives).
South African insurers are, in fact, perfectly positioned to take advantage of big data and the rich supply of potential data streams that can reveal powerful insights into customers’ behaviour and preferences.
For most local insurers, the goals for the coming years will be to digitally transform operational processes (to handle the influx of new data sources) and to start using these insights to create truly great customer experiences.
Here are four specific areas where intelligent use of big data can spur transformation in the insurance model:
Acquisition and onboarding
Approximately 5 percent of all insurance in South Africa is originated via digital channels (with the rest being fulfilled by the traditional channels of call centres and broker networks). However, digital and social media are offering interesting opportunities for insurers to promote targeted offers to potential customers, simplify the onboarding process and providing new channels of customer support.
By matching customer profiles to certain 3rd party data sources – such as the Deeds Office, eNatis vehicle registrations, or credit bureaus – much of the client’s onboarding data can be pre-populated. This means that customers aren’t asked to self-declare so much of their information, leading to increased accuracy and more attractive quotes being generated for the customer.
Micro and on-demand Insurance
As digital channels slash the price of distribution, new models of insurance in niche areas suddenly become viable. Consider the example of Scottish start-up Cuvva, which rose to fame in 2016 with its innovative app-based insurance offering – enabling people to borrow friends’ cars and receive instant cover for a weekend, a day, or even just one journey. In South Africa, there is massive opportunity for this kind of ‘on-demand’ insurance.
In a similar way, there are many South Africans that may want to insure just one item, such as a TV or a cellphone, but don’t need a comprehensive insurance policy. Big data insights can find those micro-insurance opportunities, and digital channels can serve them.
The litmus test for a great insurer is the way they handle claims. It’s at this point when customers, who are often in some form of distress, most need their insurer. With a streamlined, fully-digital approach, insurers can speed up the claim process and provide much-needed peace of mind to their customers.
Additionally, smartly employing connected sensors (in cars, connected homes, or wearables) means big data can alert the insurer in the event of a car accident, house break-in, or medical emergency. And by automatically relaying data to emergency response services, and proactively dealing with such crises, the insurer elevates their role in their customers’ lives.
Health and automobile insurance
These areas of insurance are particularly ripe for big data transformation – as real-time flows of data from connected sensors, wearables, digestibles and other end-points fundamentally change the nature of insurance.
Using the principles of gamification, insurers can create tangible, powerful incentives that encourage customers to make safer, healthier decisions. The key for insurers is to deliver these services with deft subtlety, and demonstrate that data is being used for personalised guidance (rather than as a ‘Big Brother’ watching one’s every move with a disapproving glare).
Taking advantages of these big data opportunities requires insurers to think differently about the very model of insurance. It’s certainly not a simple task… as they keep a keen focus on their customers’ evolving needs, insurers must also select the right technology to carefully navigate their way around data privacy and cyber-security concerns, and ensure compliance with the likes of the Protection of Personal Information Act.
In South Africa, the race is on to see who will be the first to get it right.
Jonathan Lewarne is the Senior Director of Insurance Business Development at TransUnion. An American company, TransUnion provides credit information and information management services to approximately 45,000 businesses and 500 million consumers worldwide.
GfK and VMware: Innovating together on hybrid cloud
GfK has been the global leader in data and analytics for more than 85 years, supplying its clients with optimised decision inputs.
In its capacity as a strategic and technical partner, VMware has been walking GfK along its digital transformation path for over a decade.
“We are a demanding and singularly dynamic customer, which is why a close partnership with VMware is integral to the success of everyone involved,” said Joerg Hesselink, Global Head of Infrastructure, GfK IT Services.
Four years ago, the Nuremberg-based researcher expanded its on-premises infrastructure by introducing VMware vRealize Automation. In doing so, it laid a solid foundation, resulting in a self-service hybrid-cloud environment.
By expanding on the basis of VMware Cloud on AWS and VMware Cloud Foundation with vRealize Cloud Management, GfK has given itself a secure infrastructure and reliable operations by efficiently operating processes, policies, people and tools in both private and public cloud environments.
One important step for GfK involved migrating from multiple cloud providers to just a single one. The team chose VMware.
“VMware is the market leader for on-premises virtualisation and hybrid-cloud solutions, so it was only logical to tackle the next project for the future together,” says Hesselink.
Migration to the VMware-based environment was integrated into existing hardware simply and smoothly in April 2020. Going forward, GfK’s new hybrid cloud model will establish a harmonised core system complete with VMware Cloud on AWS, VMware Cloud Foundation with vRealize Cloud Management and a volume rising from an initial 500 VMs to a total of 4,000 VMs.
“We are modernising, protecting and scaling our applications with the world’s leading hybrid cloud solution: VMware Cloud on AWS, following VMware on Google Cloud Platform,” adds Hesselink.
The hybrid cloud-based infrastructure also empowers GfK to respond to new and future projects with astonishing agility: Resources can now be shifted quickly and easily from the private to the public cloud – without modifying the nature of interaction with the environment.
The gfknewron project is a good example – the company’s latest AI-powered product is based exclusively on public cloud technology. The consistency guaranteed by VMware Cloud on AWS eases the burden on both regular staff and the IT team. Better still, since the teams are already familiar with the VMware environment, the learning curve for upskilling is short.
One very important factor for the GfK was that VMware Cloud on AWS constituted an investment in future-proof technology that will stay relevant.
“The new cloud-based infrastructure comprising VMware Cloud on AWS and VMware Cloud Foundation forges a successful link between on-premises and cloud-based solutions,” says Hesselink. “That in turn enables GfK to efficiently develop its own modern applications and solutions.
“In market research, everything is data-driven. So, we need the best technological basis to efficiently process large volumes of data and consistently distill them into logical insights that genuinely benefit the client.
“We transform data and information into actionable knowledge that serves as a sustainable driver of business growth. VMware Cloud on AWS is an investment in a platform that helps us be well prepared for whatever the future may hold.”