By Petrie Marx, 26 July 2018
And soon, your clients will play a bigger role in administering their investments and policies, but they will need even more professional advice as they navigate this space on their own, says Petrie Marx, Product Actuary for
Sanlam Personal Finance.
Marx says insurtech is ushering in a new era of client experience. With global trends highlighting the rise of intuitive user experiences, machine learning, automation, data analytics and the Internet of Things (IoT), there are big opportunities for South African insurers and intermediaries that become early adopters of insurance tech.
Marx says, “Customers have become used to intuitive interfaces that maximise efficiency. For insurers and intermediaries alike, there’s a real opportunity to hone an online offering as part of a strong value proposition. It’s about offering engagement with clients via the platforms they prefer." This omni-channel approach puts customers at the centre and allows them to move seamlessly between different engagement models.
He believes that, after initial improvements in customer experience are achieved, online migration and tech integration will eventually impact on insurance fundamentals like underwriting. But in South Africa, the lack of central databases with alternative underwriting information is a big barrier. “In the US, the national health system means there’s a centralised database of health records to tap into. Similarly, pharmacy or driving records are available. There’s no equivalent here yet, which means we don’t have alternative data sources available to simplify the underwriting process we ask our customers to go through yet. Of course, we could cut back on underwriting altogether, but that makes
insurance unaffordable to the majority of clients.”
Without access to other customer records – like medical and driving records – insurers have to rely on one of two approaches to simplify the underwriting process: ask sophisticated drill-down questions in line with a rule-based approach or to greatly simplify the entire underwriting process and perform limited randomised tests only – like the
Sanlam Express solution. Data analytics and predictive modelling can be used to optimise underwriting requirements to eventually streamline the process as far as possible for our customers.
But it may not be like that for long. Marx says 2018 is the year in which insurtech will allow insurers to engage differently with their customers and to devise specific solutions to customers’ needs. By 2020, he believes the customer experience will become more seamless, with all specific innovations combined to create one cohesive journey. This means intermediaries and insurers need to stay abreast of global trends and be ready to integrate the best of these into their South African operations.
Marx concludes, “Intermediaries and insurers need to think like start-ups, with a focus on integrating the latest innovations. The retail distribution review (RDR) regulations are encouraging intermediaries to display their value proposition more prominently than ever before. No doubt intermediaries who adopt technology and are able to engage with their customers through multiple channels will have an indisputable edge."