The digital revolution promises to change the face of South Africa’s insurance market over the next few years, making the industry more convenient, and more personalised.
Bryan McLachlan, CEO at Instant Life, said that as technologies such as the Internet of Things, wearable computing, big data, and cloud computing mature, aggressive financial services companies will be able to deliver even more compelling and affordable products to the market.
Having become used to online banking, ordering transport through the Uber personal app, and buying from Amazon, customers want it to be as efficient and easy to deal with insurers.
Yet, according to McLachlan, many traditional insurers are struggling to keep up with their customers. “This context means that the market is ripe for disruption by agile, tech-driven companies that can offer greater convenience, deeper personalisation and lower costs to their customers.”
According to EY’s Global Customer Insurance Survey 2015, customers want more frequent, meaningful and personalised communication with their insurers. Accenture’s 2015 Consumer Pulse Survey, meanwhile, reveals that half (47%) of insurance customers want more online interactions with their insurers.
McLachlan said that the Internet of Things, wearable computing, and big data is rapidly changing how insurance products are distributed and priced.
In short-term insurance, many car insurers reward customers with lower premiums if they allow them to track their driving behaviour via vehicle telematics.
Instant Life said it is investing in fitness wearables and other technologies to bring similar options to life insurance. For example, customers who purchase Instant Life’s Fitlife product who wear a Fitbit receive premium discounts in exchange for their health data and for following a healthier lifestyle.
As the technology matures, it can even provide early warning of health issues such as the danger of a heart attack.
The collection of big data from wearables and Internet of Things devices, could enable insurers to price risk more accurately for each insured person.
To date, the market for such technology has been niche, but it will grow rapidly as people become more comfortable with sharing their data and begin to understand the benefits of doing so, Instant Life said.