Insurance companies that will strategically position themselves for this
transformation will reap big in the home, health and car insurance
sectors. file photo | nmg
Innovation is a powerful tool of staying relevant and moving
ahead of the rest in the ever evolving consumer market. It can do the
same in insurance even as new and well-funded technology-based start-ups
pose a real threat to industry giants.
While
innovation alone will not guarantee the sustainability of insurers, it
holds the largest share of responsibility towards this end. Already we
have begun seeing change in that direction with some of the insurance
companies in Kenya and South Africa adopting digital changes to serve
their clients better.
Thanks to the proliferation of
smartphones and other software development tools in Africa, we are
seeing the emergence of innovative digital platforms that offer users
and potential clients better information and transparency.
Insurance
companies that leverage on some of the technological advances will
continue to thrive as the rest play catch up. Technology has unearthed
opportunities that are not only exciting to consumers but also
convenient as far as adoption and servicing go
A number of insurers in Kenya have apps for clients. In
February, Jubilee Insurance launched JubiCare and JubiAgent, the apps
that allow self-service using smartphones. Jubilee Insurance
also integrated Artificial Intelligence into their Facebook Page
through the use of a chatbot called Julie, its Live Intelligent Expert
who answers queries. This means faster and efficient service delivery.
Data
also informs decision-making across industries. Data technology has in
the recent past transformed risk which is the primary element of the
insurance business model.
Technology has changed the
way data is created, captured, analysed and stored. Insurance firms have
many sources from where they can collect data and help create important
and personalised products, helping in the management of risk.
International
Data Corporation estimates that the digital universe will double in
size every two years. This will create a large pool of data attributes
from which insurance companies can acquire meaningful data that will
influence decisions in product designs, risk management, fraud reduction
and tailored premiums.
A myriad of breakthrough
technologies in this industry are set to spur significant growth and
transformation and players must change with the tide or prepare to close
shop.
These include Internet of Things, Telematics, Digital platforms, Blockchain technology, Artificial Intelligence and Cloud Computing.
These include Internet of Things, Telematics, Digital platforms, Blockchain technology, Artificial Intelligence and Cloud Computing.
Apart from product development, the technologies provide and and modify business models.
The
Internet of Things (IoT) is the perfect example of how new, better and
current data will help define the insurance industry’s transformation.
This
data will inform the underwriting policies and risk management
procedures that will help reduce the cost of offering insurance both in
the short and long term. IoT devices may include phones, home security
sensors, and wearable monitors.
Motor insurance
continues to be a major driving factor and an important contributor to
the Gross Written Premium (GWP) for insurance companies across Africa.
In Kenya, for instance, it is against the law to drive a vehicle without
motor insurance.
While this does not apply in all
countries in Africa, this is an area that is set to be transformed by
innovation especially using connected devices.
Telematics
can help transmit important and valuable data that can be leveraged to
get a complete user profile of an insured. Through this data, insurance
companies can then assess the risk profile of a potential client in
addition to all other details and help customise a plan for the client.
Artificial
Intelligence (AI) has enabled computer software to exhibit human-like
behaviours that include planning, learning and solving problems.
AI
has also enabled these computers to solve problems and make decisions
after analysing information. This technology offers more advanced
characteristics such as image recognition, voice recognition and so much
more.
It is expected that AI will replace many human
functions in the coming decade. Insurance companies stand to benefit a
great deal by tapping into this technology.
Companies
such as Jubilee Insurance in Kenya have already taken advantage of AI
capabilities. Through their Digital Virtual Assistant named Julie,
clients can receive real-time services that include end-to-end purchase
of insurance products without any human intervention.
By
2020, it is estimated that there will be more than 20 billion devices
connected to the Internet. Insurance companies that will strategically
position themselves for this transformation will reap big in the home,
health and car insurance sectors.
Elias Kokonya is Senior Business Analyst, Jubilee Insurance.
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