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Fintech to change insurance

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Life insurance is set to become more personalised, more convenient and more accessible as insurers begin to more aggressively adopt disruptive digital technologies.

Life insurance is set to become more personalised, more convenient and more accessible as  insurers begin to more aggressively adopt disruptive digital technologies to change the ways they interact with customers and operate their businesses. As a result, the industry will be able to expand its reach into new markets as well as deliver a better customer experience.

That’s according to Bryan McLachlan, CEO of Instant Life, a member of Absa, who says that life insurers are beginning to re-evaluate their business models as connected customers begin to demand a more seamless experience from the industry and as new FinTech players come to market with innovative technologies and business models.

Says McLachlan: “To date, life insurers haven’t made it easy for customers to buy their product, expecting them to fill in endless forms and go for medical check-ups. They’ve lagged on the adoption of digital channels – such as the smartphone and the web – in some segments of the financial services industry.

“One consequence of this is the reality that the life insurance customer experience feels low-tech, inconvenient and impersonal compared to the on-demand experience customers get from mobile banking and other apps. Another is that the segment of the market where people need life cover – yet don’t have a broker – has been neglected.”

The rise of the FinTechs

Per a Bain & Company study, only 8% of new life premiums worldwide flow through online or mobile sales channels today, and the number in South Africa is likely to be less.

“But, with the rise of digital competitors – such as emerging FinTech companies – and the availability of big data analytics and digital back-office systems, this picture is likely to change soon,” says McLachlan.

He notes that Accenture’s research estimates that global investment in InsurTech – startup companies seeking to use digital tech to disrupt the traditional insurance industry – soared from $800 million in 2014 to $2.6 billion in 2015. Instant Life, launched a few years back as a digital life company, was an early example of this trend.

Instant Life’s business model isn’t just about selling insurance across the web – it is also about using powerful, cloud-based underwriting systems and analytics in the back-office to boost customer service and efficiency online, over the telephone and face to face with financial planners and advisors.

“Our lean, paperless systems enable people to get life cover online, over the telephone, or face to face in under 30 minutes – no medical examination required,” says McLachlan.

“This approach is attractive to people who want a better, customer experience when purchasing underwritten life cover Rather refence Frost and Sullivan.  A compelling digital life insurance proposition shouldn’t be about grafting a website onto the front of a manual, paper-based process.” But about re-engineering the business model to provide a paperless solution across all distribution channels.

Partnership between traditional and digital insurers

McLachlan says that as part of the Absa Group, Instant Life has the best of both worlds.  Instant Life’s lean, entrepreneurial business model and stability and brand recognition of a major financial services group, which would help it to accelerate its growth.

“In future, partnerships between InsurTechs and traditional financial services groups will be common,” he adds.

In addition, Absa has also proven itself to be an innovator in the insurance industry. For example, it has done pioneering work in developing predictive underwriting technology that allows it to confidently offer life insurance to customers based on customer data and a few questions. The solution uses an algorithm based on banking behaviour that predicts whether a client will qualify for its life cover.  We should reference the business awards won two years running.

Looking ahead to the future, Instant Life believes that big data holds the key to a more profitable business for life insurers and a better experience for customers. Life insurers like Instant Life are today encouraging customers to use wearables to track physical activity, sleep and other physical health indicators, giving them access to rich pools of data.

Healthier lifestyles

“Indications are that people start to lead more healthy lifestyles as soon as they start monitoring these metrics,” says McLachlan.” But in future, this data will give life insurers data they can use to better personalise their offerings, help customers with lifestyle advice and develop ever-more accurate models for underwriting.”

Another benefit is that life insurers get to communicate with customers more often, when post-sales interactions are usually limited to debiting their premiums each month. In addition, life insurers can be expected to make wider use of social media and messaging platforms such as WhatsApp in the future.

“Thanks to big data and the cloud, we can now begin to underwrite life cover more cost-effectively and efficiently than ever before,” says McLachlan.

With digital channels such as the Web and mobile we can distribute and service policies in a manner that is faster and more convenient for the consumer. These developments promise to bring life insurance right up to date with the experiences connected consumers already enjoy from other industries.

Africa News

Smart grids needed for Africa’s utilities

Power utilities across Africa should rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem, says COLIN BEANEY, Global Industry Director for Asset-intensive and Energy and Utilities at IFS.

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Africa’s abundant natural resources and urgent need for power mean that it is one of the most exciting and innovative energy markets in a world that is moving rapidly towards clean, renewable energy sources. The continent’s energy industry is taking new approaches to providing unserved and underserved communities with access to power, with an emphasis on smart technologies and greener energy sources.

Power systems are evolving from centralised, top-down systems as interest in off-grid technology grows among African businesses and consumers. And according to PwC, we will see installed power capacity rise from 2012’s 90GW to 380GW in 2040 in sub-Saharan Africa. Power utilities are needing to rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem.

Energy and utilities providers are transforming from centralised supply companies to more distributed, bi-directional service providers. They can only achieve this through the evolution of “smart grids” where sensors and smart meters will be able to provide the consumer with a more granular level of detail of power usage. This shift from an energy supplier to “lifestyle provider” will require a much more dynamic and optimised approach to maintenance and field service.

African companies must thus embrace digital transformation as an imperative. This transformation begins by embracing enterprise asset management to improve asset utilisation. The subsequent steps are enhancing upstream and downstream supply chain management; resource optimisation; introducing enterprise operational intelligence; embracing new technologies such as the Internet of Things, machine learning, and predictive maintenance; and becoming a smart utility.

Embracing mobility to drive ROI

Getting it right is about putting in place an enterprise backbone that accommodates asset and project management, multinational languages and currencies, new energies and markets, visualisation of the entire value chain, and mobility apps. Mobile technologies that support the field workforce have a vital role to play in driving better ROI from utilities’ investments in enterprise asset management and enterprise resource planning solutions.

Today’s leading enterprise asset management solutions feature powerful functionality for mobile management of the complete workflow of work orders – from logging status changes and updates, from receiving and creating new orders to concluding the job and reporting time, material and expenses. Such solutions are easy to deploy and intuitive for end users to learn and use.

Importantly for organisations operating in parts of the continent with poor telecoms infrastructure, connectivity is not an issue. The solutions work offline and synchronises when network connectivity is available. Users can work on any device—laptops, tablets, and smartphones—commercial or ruggedised.

By ensuring that field technicians have easy access to information and processes, the mobile solution enables technicians and maintenance engineers to easily do the following tasks:

·         Create a new work order on the fly and log new opportunities

·         Access both historical and planned work information when requested

·         Permit customers to sign when the job is completed

·         Capture measurements and inspection notes on route work orders

·         Create new fault reports on routing

·         Facilitate documentation through photo capturing

·         Provide easy access to technical data and preventive actions.

The power of mobility allows the engineer to be the origin of all data capture on a service event. They can easily inquire on asset history, record parts used or parts needed for repair, record labour hours, and expenses as they occur, and any notes of repairs performed. When coupled with workforce management tools, such solutions unlock significant productivity gains for utilities who are trying to get the most from their workforce and assets.

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Brands fall for app vanity

The experience of a mobile screen full of icons, representing independent apps that your need to open to experience them, is making less sense. Instead, businesses should serve customers with an ‘app-like’ experience inside the digital platform they already use, says PIETER DE VILLIERS, Group CEO at Clickatell.

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Many brands remain obsessed with creating mobile apps. This not only defies trends that point to increasing consumer app apathy, but can exclude a sizeable portion  of your customers in emerging economies. Companies need to engage with their users where they are rather than forcing them onto an app, in what can only be described as brand vanity. 

In 2017 there were around 2.2 million apps available in the iOS app store and over 3 million on Google Play. And, while the number of apps being downloaded continues to rise, analysis shows that consumers are only using 30 apps per month and accessing just 9 on a day-to-day basis. 

While these numbers still seem attractively high, in reality the majority of the apps we use are for messaging (like Facebook Messenger, WhatsApp, and WeChat) and our social networking, gaming, leisure, dating or utility activities. 

Despite the facts, the application strategy as the holy grail for digital transformation is still being pushed even within large progressive brands. What’s more, some advertising agencies and digital consultants are still pushing apps as the best means for companies to connect with their customers. This has resulted in some organisations stubbornly doubling down on app strategies which are simply not showing return on investment (ROI). 

It’s not immediately clear to us whether the fascination with apps is a roll-over from long overdue projects or whether brand owners equate a mobile-first strategy with a mobile app. Mobile-first in 2018 means customer first, and therefore embracing chat commerce in order to deliver services with convenience and simplicity in mind. 

Why apps won’t win the internet

The problem with apps goes beyond user fatigue. In the first instance, many apps are poorly designed, assuming technical sophistication which may not match reality for the average customer. Poor user interfaces and attempts to provide complex engagement can result in even the best ideas missing their targets due to lack of engagement. 

Secondly, we all know that economic realities drive consumer behaviour. In Africa, new mobile phone users typically opt for feature phones over smartphones. With a longer battery life and a much more accessible price point, feature phones still allow for a basic internet connection, chat platforms like WhatsApp, and call and message functionality. In these regions, the cost of an app – even if it’s free – goes far beyond installing it. Constant updates require reliable and cheap access to the internet. For the average phone owner in an emerging market, this can be a serious challenge. 

Thirdly, and most importantly, apps must be relevant to their intended market. Frequency of usage is a key measure of relevance. 

Apps which are used on a daily basis, like health and fitness trackers, enjoy constant engagement. New features which are added are eagerly awaited by users who are happy to update their apps. 

However, users may well question the relevance of the app if they are required to conduct updates on a monthly or even weekly basis when they are only making use of the app once or twice a year. 

On average, I download one app per quarter. Some I use more frequently than others, but all of these apps need to be regularly updated to maintain security, update features, and fix bugs. Many apps are pushing out updates much more frequently. I noticed over the past year that I could go from having all apps updated, to 32 apps requiring an update in five days.

When it comes to a customer-first digital strategy, companies should be asking themselves if an app is really the best way to reach their target audience. 

In fact, at the end of 2016, Gartner predicted that by 2019, 20 percent of brands would ditch their mobile app. What’s more, in its 2018 predictions, the company forecast that by 2021, more than 50 percent of corporations would spend more per annum on bots and chatbots than on mobile app development. 

So, we need to ask, what is the alternative for CIOs, CDOs, CMOs, and digital leaders who are looking for ways to reach, retain and grow their customer base? 

The logical app alternative 

The old battle advice goes: fight your enemy where they are not. Military strategists agreed that having your enemy come to you and fight you on your own terms was preferable. In a world where customers have access to thousands of offerings and millions of deals online, we need to flip that idea to Meet Your Customers Where They Are. 

Any marketeer will tell you just a how difficult it is to drive app downloads. Development, cross platform testing and user interface aside, the marketing campaign required to get customers to download the app can swallow entire annual budgets and still come up short. 

Looking at the facts, it makes infinitely more sense to work within the digital platforms already being used by your target audience. 

Clickatell is already enabling chat commerce for some of the leading global brands with its Touch solution. This allows organisations to serve their customers with an ‘app-like’ experience inside the chat or browser platform of their customer’s choice (Twitter, Facebook Messenger, etc.) 

Brands can now send an actionable Touch link such as ‘find the nearest ATM’ or ‘reset my password’ within a chat stream that will open an intuitive touch card without the user having to download an app to perform the action. Services can also be linked to the in-app experience for brands not looking to abandon their app efforts. 

Working with our clients, many of whom are global innovators and thought leaders, we’ve found that having the courage to design with an ‘end user first’ approach and dealing with the back-end complexity behind the scenes results in cost efficient customer delight and ROI. 

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