Mishaya Chettiar, Executive Head at Everything.Insure.

More than a decade ago, the customer's purchasing journey was very different from what we see today. Prior to the advent of the digital consumer, customers were essentially presented with a variety of brands selling a specific product or service, and differentiating factors such as price or quality would influence their purchasing decision.

Although these factors are still important to consumers, the increased connectedness of the digital age and access to information have given consumers greater buying power while making them more discerning. As such, consumers are looking at more than just price; they’re looking for more authentic and personalised experiences that clearly demonstrate that they are valued and that their needs are being catered to by the brand they are choosing to purchase from.

For example, if you were looking to buy a car online, you’re no longer just looking at how much the car would cost as a deciding factor before you purchase. In fact, you’d likely want to compare factors like the individual features of each car, such as fuel efficiency, mileage, and age, as well as reviews and ratings of each car brand or dealership, before looking at price.

In meeting this changing consumer demand, the insurance industry has long lagged behind. Insurers have traditionally been very focused on differentiating themselves via price, but today, positioning the customer as the focal point of all decisions related to product and service delivery is a crucial area for the industry to evolve. This is as customers continue to demand increased digitisation, accessibility, flexibility and individualisation.

This requires taking action to meet the needs and expectations of consumers, such as more automated and efficient processes, flexibility in product offerings, tailor-made risk profiling, and subsequently more affordable options.

According to Deloitte’s Africa Insurance Outlook 2022 insurers can provide customers with streamlined, deliberate and individualised customer offerings through digitisation and the adoption of emerging technologies. In short, Insurtech (the use of technology innovations to improve efficiency and find cost savings) holds the key to redefining insurance on the continent, and more specifically in South Africa.

Technology enables customer-centricity

Insurance is vital to consumers as it helps to protect us against any unforeseen events and circumstances that would lead to financial stress from loss. However, South Africans face a high barrier to entry in relation to insurance, which often does not cater to individuals' unique insurance needs, especially as it pertains to affordability.

In fact, only 17 out of every 100 South Africans have medical insurance, 70% of the more than 11 million registered vehicles on the country’s roads are not insured against accidents or damage, and only 10% have life insurance (excluding funeral cover).

Following the disruption of the global pandemic and its economic impact, rising inflation, and a cost of living crisis, South Africans are facing financial distress. Because of this, a growing number of consumers are calling for more flexible and affordable coverage options.

Insurtech is set to disrupt this low uptake landscape in the country’s insurance industry by transforming it into one that is more customer focused and therefore better equipped to meet South African consumers needs.

By using technologies such as AI, machine learning, and data analysis, Insurtech is enabling the creation of insurance products with intelligent underwriting that are more competitively priced through adaptable and tailored solutions, empowering consumers with the ability to make changes to their insurance plans or submit a claim anywhere at any time, and facilitating the ability to stop and start their insurance plan based on when they need it and when they don’t, with just a simple click of a button. Prior to the adoption of these technologies in the industry, there was no way to tailor products to individual customers or to tailor underwriting rules.

These technologies have enabled greater efficiencies for customers in regards to timely claims processes, risk evaluations, and the processing of policies. And, with AI, insurance systems are able to automatically make changes or suggest new offers to a customer’s profile based on changes to their individual risk profile or shifts in the insurance industry.

Until now, insurance was a complex and confusing subject to tackle for consumers who knew very little about the industry. But, Insurtech is empowering customers with a greater level of information at their fingertips before they make a purchasing decision by enabling consumers to compare the products, services, and features of different insurers and find the one that fits just right for their unique wants and needs.

Essentially, Insurtech is giving South African consumers greater agency in their insurance decisions and is leading to improved outcomes in the way that the market operates - in favour of the consumer over the industry.

When a business integrates customer centricity into its business strategy, the organisation is able to change the way that it thinks about and communicates with its customers on all levels. This results in more authentic customer experiences and significant cost savings for consumers.

And, just like the FinTech revolution brought on a new wave of innovation within the financial services industry, Insurtech is primed and ready to reshape and redefine what insurance looks like and what it means for consumers not only in South Africa, but across the African continent and the rest of the world. Now, just like they’re able to with every other area of their lives, consumers will be able to take greater ownership of their insurance portfolio.