The South African insurance sector is experiencing an increase in demand for self-service, with automation and artificial intelligence (AI) integration now essential for market growth.

Ritesh Varma, vice-president of business solutions consulting at Newgen Insurance Connect in India, recently delivered a keynote speech at the The Newgen Insurance Connect organised by the International Center for Strategic Alliances in Johannesburg, South Africa.

This year's event focused on how automation technologies and AI-driven insights are reshaping consumer experiences in the insurance industry.

The industry expert pointed out that an automated, intelligent client experience is no longer a choice, but rather a strategic imperative.

In his address, Varma, a 25-year veteran of banking, financial services and insurance, said AI will improve customer experience in underwriting, claims and service; yet, adoption remains a hurdle for businesses.

In the context of South Africa, Varma provided his views on what is defining the future of insurance through AI-driven innovation.

He noted that a substantial segment of the population, particularly those under the age of 35, is looking for digital, flexible insurance solutions, which will play an important role in shaping insurance in SA.

Gen Z wants it all

Varma explained in an interview with ITWeb Africa: “South Africa, in fact all of Africa, is at a really interesting crossroads. There is an increasing number of Generation Z or millennials that desire to do everything themselves.

“The power of digital is extremely important today. What the South African market has done is automate parts and pieces.”

He suggested the South African insurance business needs to combine all of these 'parts and pieces' together and add intelligence to the entire insurance process, applying AI and GenAI, and making services automated and intelligent to cater to millennials.

Varma said: “They [millennials] want everything done right away and by themselves.

“They are heavily exposed to the internet. They generally use social media, such as Instagram, Facebook and Twitter. They hold a strong opinion.

“Yes, it is up to you as an organisation, or an insurance company, to identify those moments of truth, apply intelligence to them, and automate what they want. And that would be the tipping point for the insurance industry. They would be able to have an impact there.”

Era of personalisation

According to Varma: “There are two aspects to AI [in insurance], thus the possibilities are infinite, in each component of the journey. So, when I say journey, I mean customer experience, operational excellence and bringing the latest technology together to complete journeys and make the customer's life lot easier.

“AI has a role to play everywhere. In terms of insurance, you work with three primary areas, correct? The first step is underwriting, followed by claims, and finally, by customer service.

“In each of the three areas, you may use AI and GenAI to make the job easier. For example, in underwriting, rather than going to a real underwriter every time, AI can do it for you and offer goods to you.

“If you're not sure which product is best for you, it can make recommendations based on your needs, analyse motor claims, understand your driving pattern, and provide you with policies or rates that are tailored to your needs rather than one-size-fits-all.

“The era of hyper-personalisation is coming up and would largely be driven by AI, especially in the insurance space.”

In the interview, Varma also discussed how insurance businesses are now making use of technologies.

“Companies seek to adopt technology. Everyone is discussing it. However, what to do in technology remains a challenge for businesses.

"Things like AI, GenAI and others require some handholding, which companies like us or providers like us can deliver in a lot simpler way to these end-user organisations.

"I say this because we work together with multiple organisations around the world and bring in best practices.”