3 ways you can use technology to lower your South African insurance premiums

The insurance industry has been characterised as traditionalist and conservative – an industry that is slow to change with limited consumer reach.

Technology innovations can thus be regarded as the new frontier for the insurance industry as these new developments are seen as a move-away from the historical and typical business models used by insurers to conduct their business, according to Cliffe Dekker Hofmeyr’s Verusha Moodley and Byron O’Connor.

Citing a recent international insurance report on FinTech development in the industry, CDH noted that there are various drivers that are encouraging this change.

“The internet of things, which relates to the inter-connectivity of devices that allows for the collection and exchange of data, has allowed for more information to be collected on consumers.”

“This, in turn, allows insurers to improve their forecast on incumbent risks.”

“The use of new technologies can also improve pricing, risk selection and naturally, the overall efficiency of insurers’ operations,” CDH said.

However not all of these technologies are consumer facing and while they may improve the insurance experience, they may not be immediately.

Here are some of the technologies you can actually use in South Africa right now to help reduce a variety of insurance premiums.*


Smart homes and property insurance

Home monitoring systems can provide insurers with data on and control over household risks.

For example, ADT Pulse allows homeowners to remotely monitor their homes, remotely arm and disarm their homes, as well as to monitor water and flood sensors through their tablets or smartphones.

The data received can help insurers better manage risk and mitigate losses by providing important information with the ultimate aim of avoiding the occurrence of an insurable event.

This, in turn, can result in fewer claims and improved customer satisfaction.

“Smart” homes can thereby reduce the severity and frequency of household and property insurance claims.

One example of this can be seen in South African smart home installers – Nuru.

It’s integrated security system can both sound a siren or call the monitoring station when detecting a security issue.

In addition it can also to turn on interior lights when there is an alarm, allow you to view live feedback of surveillance cameras from any TV, touch screen or from your phone when you are away, and has the ability to turn any light switch in your home into a panic button.

Wearables, and health and life insurance

 

Fitbit is a wireless-enabled wearable technology device that measures data such as the number of steps walked, heart rate, quality of sleep, and other personal metrics involved in fitness.

The use of wearable biometric sensors, such as Fitbits, can provide insurers with information on the health of an insured.

With use of wearable sensors, like the Fitbit, insurers can receive data on an insured’s exercise habits, heart rate and blood pressure.

This data can assist the insurer in its assessment and underwriting of a health risk.

Telematics and car insurance

Devices connected to a vehicle can transmit data for the purpose of assessing an insured’s risk profile.

The information received can assist insurers to make informed underwriting decisions and provide appropriate policies in turn.

Discovery has been one of the leaders in this arena with its DQ-Track programme.

Driver’s DQ (Driver Quotient) is calculated according to your Driver performance score, your driving knowledge and awareness and how safe your car is to drive.

Some of the factors used when considering your score include:

  • Acceleration
  • The speed you drive at
  • Braking
  • The way you take corners
  • Night time driving (between 23:00 and 04:30)
  • Distance
  • Your smartphone activity.

*These technologies are not applicable to all South African insurers or premiums. BusinessTech recommends you contact your insurer directly before making any purchasing decisions to see what options are available to you. 

 Read: How SA insurers could use your social media posts to determine your premiums

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