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.
“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.
Kenya tool to help companies prepare for emergencies
After its team members survived last week’s Nairobi terror attack, Ushahidi decided to release a new preparedness tool for free, writes its CEO, NAT MANNING
On Tuesday I woke up a bit before 7am in Berkeley, California where I live. I made some coffee and went over to my computer to start my work day. I checked my Slack and the news and quickly found out that there was an ongoing terrorist attack at 14 Riverside Complex in Nairobi, Kenya. The Ushahidi office is in Nairobi and about a third of our team is based there (the rest of us are spread across 10 other countries).
As I read the news, my heart plummeted, and I immediately asked the question, “is everyone on my team okay?”
Five years ago Al-Shabaab committed a similar attack at the Westgate Mall. We spent several tense hours figuring out if any of our team had been in the mall, and verifying that everyone was safe. We found out that one of our team member’s family was caught up in the attack. Luckily they made it out.
At Ushahidi we make software for crisis response, including tools to map disasters and election violence, and yet we felt helpless in the face of this attack. In the days following the Westgate attack, our team huddled and thought about what we could build that would help our team — and other teams — if we found ourselves in a similar situation to this attack again. We identified that when we first learned of the attack, nearly everyone at Ushahidi had spent that first precious few hours trying to answer the basic questions, “Is everyone okay?”, and if not, “Who needs help?”
People had ad-hoc used multiple channels such as WhatsApp, called, emailed, or texted. We had done this for each person at Ushahidi (their job), in our families, and important people in our community. Our process was unorganised, inefficient, repetitive, and frustrating.
And from this problem we created TenFour, a check in tool that makes it easier for teams to reach one another during times of crisis. It is a simple application that lets people send a message to their team via SMS, Slack, Voice, email, and in-app, and get a response. It also works for educational institutions, companies with distributed staff, as well as part of neighbourhood networks like neighbourhood watches.
This week when I woke up to the news of the attack at Riverside, I immediately opened up the TenFour app.
Click here to read how Nat quickly confirmed the safety of his team.
Kia multi-collision airbags
The world’s first multi-collision airbag system has been unveiled by Hyundai Motor Group subsidiary KIA Motors, with the aim of improving airbag performance in multi-collision accidents.
Multi-collision accidents are those in which the primary impact is followed by collisions with secondary objects, such as other vehicles, trees, or electrical posts, which occur in three out of every 10 accidents. Current airbag systems do not offer secondary protection when the initial impact is insufficient to cause them to deploy.
However, the multi-collision airbag system allows airbags to deploy effectively upon a secondary impact, by calibrating the status of the vehicle and the occupants.
The new technology detects occupants’ positions in the cabin following an initial collision. When occupants are forced into unusual positions, the effectiveness of existing safety technology may be compromised. Multi-collision airbag systems are designed to deploy even faster when initial safety systems may not be effective, providing additional safety when drivers and passengers are most vulnerable. By recalibrating the collision intensity required for deployment, the airbag system responds more promptly during the secondary impact, thereby improving the safety of multi-collision vehicle occupants.
“By improving airbag performance in multi-collision scenarios, we expect to significantly improve the safety of our drivers and passengers,” said Taesoo Chi, head of the Hyundai Motor Group’s Chassis Technology Centre. “We will continue our research on more diverse crash situations as part of our commitment to producing even safer vehicles that protect occupants and prevent injuries.”
According to statistics by the National Automotive Sampling System Crashworthiness Data System (NASS-CDS), an office of the National Highway Traffic Safety Administration (NHTSA) in USA, about 30% of 56,000 vehicle accidents from 2000 to 2012 in the North American region involved multi-collisions. The leading type of multi-collision accidents involved cars crossing over the centre line (30.8%), followed by collisions caused by a sudden stop at highway tollgates (13.5%), highway median strip collisions (8.0%), and sideswiping and collision with trees and electric poles (4.0%).
These multi-collision scenarios were analysed in multilateral ways to improve airbag performance and precision in secondary collisions. Once commercialised, the system will be implemented in future new KIA vehicles.