Insuretech 2017: 3 trends to watch in Insurance
By Riaan Bekker
This is a very exciting time to be in the insurance industry. Very exciting… and unnerving. So many technology concepts are swirling around that it is hard to select the right digital strategy.
The 7th Insurance Distribution & Insuretech Conference, held at the end of August in Cape Town and hosted by Cover Magazine, was the place to find answers. It would be impossible to capture the wide range of presentations or the eye-opening topics they discussed. But I managed to scribble a few notes, capturing three trends insurers must keep front of mind.
Trend 1: Old business models are in the firing line
The presentations at Insuretech shared many common themes, but none was threaded as widely as the challenges facing older business models due to their reliance on legacy systems.
Genasys Technologies Director, Craig Olivier, compared the cultural differences between incumbent insurers and startups. Through leveraging technology, startups have higher tolerances for failure, are able to making lightning-fast decisions, build more products around usage-based models and give more customisation choices to customers.
Samuel Tayengwa, Transunion Senior Product Consultant, brought this closer to home with comparisons between local and international insurers. South African companies are lagging behind international adoption benchmarks for online services. It is estimated that an unbelievable 90% of application process data is still captured manually, coupled with outdated and expensive quality assurance processes. It matters to be able to expand online: at the very least, international insurers are reducing operational costs by half through their online strategies.
If older business models do not adapt and shift away from their legacy systems, they are not going to survive.
Trend 2: Automation and data consolidation are the levers for change
You may want to sit for this: 65% of claims departments still use legacy systems.
This is causing big rifts between companies and the data that should add value to them. ClaimVantage’s Business Development Manager for Africa, John Murphy, pulled no punches here: these environments persist on paper files and data silos, and are rife with double captures and manual workarounds. The loss of resources is self-evident: just look at reporting lag to show how big this deficit is growing. Yet 70% of insurance CEOs see technology, and the customer behaviour change it fuels, as disruptive to their business models, according to a PWC survey, said Murphy.
Tony van Niekerk, Editor-in-Chief of Cover Magazine, drew similar conclusions. He compared the situation to banks, which have been evolving along the digital curve. Silos and outdated segmentation bias had to be phased out for newer and more nuanced technologies in order for that industry to move forward.
How can insurers address this? Murphy raised affordable process automation found in modern digital platforms. These same platforms are evolving insuretech, opening doors to consolidated data, predictive analytics, omni-channel customer experiences and artificial intelligence. By tackling automation and data, insurers can start innovating along these new developments.
Trend 3: Keep an eye on blockchain and bots
The momentum of technology has reached a point where truly significant breakthroughs are moving into the market much faster than anyone imagined. For example, blockchain’s practical manifestation arrived in 2008 – not even a decade later and it is primed to entirely change every trust industry.
Thomas Kieck, Business Development Director at Tial Technologies, dedicated his presentation to a detailed look around blockchain and its impact. It would take more space to explore the significance of this technology, but insurers absolutely cannot ignore it. As Kieck put it, blockchain is not a technology, but a strategy that is going to transform markets. It threatens the middleman – the phenomenon of disintermediation is going to become the norm.
Chatbots may not be quite as tectonic, but they also deserve closer scrutiny. Sanlam’s Neo Mohlala analysed the rise of these customer interfaces: at present 35% of all insurance interactions are digital – a number that will not only grow, but doesn’t even reflect the impact of chatbots yet. Laying out the reasons for chatbots, how they can compliment staff and how a chatbot environment would operate, Mohlala successfully advocated you do not ignore this touchpoint.
Antoine Paillusseau, CEO of Finchatbot, did the same, explaining how messenger platforms are addressing many of the interaction shortfalls customers have through other digital mediums, such as websites. He also pegged chatbots to the increasing tendency of communications providers to reduce or nullify data costs for messenger apps, a boon for insurers in data-starved markets.
These three trends make it clear: it is vital for insurance firms to look at the agility of modern technology platforms, such as Riskonnect, powered by the Salesforce ecosystem. These environments are easy and cost-effective to implement, and can be scaled from a small toehold to across an organisation. With partners such as thryve, concerns of data, security and integration with existing systems is far less challenging than past IT projects would have made you believe.
But don’t ignore the above. Change is coming. To lift the Ronald Reagan quote from Craig Olivier’s presentation:
“Status quo, you know, is Latin for ‘the mess we’re in’!”
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