By Dr Nolwandle Mgoqi, Chief Executive for Long-term and Short-term Insurance at Standard Bank.
Recent events like the Covid-19 pandemic have highlighted the demand for digital insurance products and accelerated the development of customised offerings by traditional and digital-only insurers.
Consumers want the convenience of choosing when and how they interact with a product or service as they already have the benefit of this experience when they use other financial and travel services. They have also become more attuned to their real insurance needs as the pandemic helped to remind them what is important to them.
Meanwhile, the increasing availability and application of digital technologies such as the Internet of Things (IoT), artificial intelligence (AI) and blockchain provide insurers with valuable dynamic data that enables them to bring innovative offerings to the market.
The new generation of insurtech companies are driving the traditional insurance sector to transform. They are also proving to be valuable partners to traditional insurers who want to provide digital products and services.
All these factors are working together to form a dynamic, digital insurance marketplace where individual customers can obtain solutions that represent true value to them.
Local consumers have demonstrated their appetite for digital insurance products and processes in the past two years when they used online and mobile channels to complete their claims with institutions like Standard Bank Insurance.
This digitisation of the insurance process has made on-demand, usage-based and parametric products viable as leading insurers are using dynamic data to offer customers personalised premiums and products. This is in contrast with the traditional, one-size-fits-all insurance offerings of the past that were based on static data.
Technologies driving digital offerings
One of the technologies that is instrumental in transforming the insurance industry into a sector with a digital, personalised offering, is IoT, the interconnected global web of digitally enabled devices. IoT gives insurers access to a huge amount of data, including real-time data of policyholders’ lives, which enables them to offer customers tailor-made products.
Advanced analytics also has an application in digital insurance since it has the capability to parse vast amounts of existing data to deduce what individual consumers need.
In the digital insurance world, the ideal is to develop a "personalised insurance engine" that considers a consumer's unique characteristics, such as web history and device usage, with permission and subject to appropriate privacy and data protection guidelines.
The information can feed into product recommendations and assist AI-based chatbots to answer consumers’ questions. An example of this is where price conscious consumers are offered usage-based insurance or auto insurance products that reward safe driving.
In many insurance markets around the world, insurers are already using telematics to provide more innovative, customised auto insurance products. The wider adoption of IoT will result in more innovative products in life, health, property and commercial insurance lines as IoT devices help customers to provide a more accurate view of their needs and insurers better understand risk.
What makes this even more exciting is that the technology gives the insurer a view of the customer's needs and preferences on an ongoing basis, enabling it to provide innovative services in real-time.
Local innovation
Locally, Standard Bank Insurance has adopted a digital insurance business model to stay true to its value of customer centricity. Standard Bank Insurance is well on its way to leveraging the latest technology in providing insurance solutions to its customers – it already employs telematics in its car insurance offering, and it offers platform services via the enhanced Standard Bank Insurance App.
While the bank is seeing customers taking charge of their insurance portfolios as well as policy updates and claims processes through various online channels, the bank is driving the roll-out of more modular insurance solutions to the local market to continue catering to customers’ individual needs.
As such, we have seen a rise in online claims from a short-term perspective to 1,988 in the course of Q2 2022 and 1,880 life policy claims via WhatsApp.
This is in line with international trends to provide modular solutions that allow customers to build their own insurance solutions that meet their individual needs and often save them money. It is an exciting development for consumers and industry since modular solutions can easily be integrated into other IoTs. This leads to the development of big data, which will enable agile insurers to serve up more tailor-made solutions in future.
The utilisation of leading technologies allows insurance institutions like Standard Bank to support customers with relevant, updated solutions on a long-term basis since they can use dynamic data to adapt personalised offerings to clients’ changing circumstances.
We will continue to find effective ways of providing relevant solutions and channels for our customers as we commit to delivering on what matters.
The changing insurance sector is set to create long-term value for consumers in this way.