Many industries, including the insurance sector, are seeing how disruptive technology is changing the way they do business – often forcing companies to re-think their strategies, writes JAQUELINE VAN EEDEN, Insurance Head at Wipro South Africa.
Disruption, once a word used to describe bad behaviour, has now been turned into a revolutionary means of changing the way business is conducted by technology. Insurance is not exempt from this disruption. We are seeing a very clear shift away from traditional means of insurance towards the newer, more evolved methods necessary for maintaining pace in a fast changing, always-on and connected world.
There are typically four main aspects of insurance: product design, pricing and underwriting, distribution and admin, and claims management. This model has been the same for decades and, despite of the increase in product complexity, the insurance business is essentially relying on policy premium income and asset management to function.
However, the rise of disruptive technologies and changed customer mind set is changing this model, and insurance companies are forced to change from product-centric model to customer-centric approach.
Insurers are moving towards customised, usage-based, real-time coverage models and moving away from risk-based underwriting approach to risk management approach. From the beginning, insurance companies have captured lot of data and advancements in big data and analytics, helping insurers in right risk selection, enabling more accuracy than ever before. Legacy interaction methods and distribution channels using call centres and one-on-one visits are being replaced, and anywhere anytime response to customers is taking top priority. Virtual technology is providing easier and instantaneous ways for clients and insurers to obtain and update information, even enabling seamless and accurate billing via mobile applications.
Emerging digital trends in insurance
There are several trends currently disrupting the insurance industry across the globe, many of which are either technology related or technology driven, which are enabling insurance companies to remain relevant and competitive. African insurance companies are following suit and embracing many of these global trends in the face of a challenging and complex market environment.
Some of the key trends that have been identified are an increased use of Internet of Things (IoT) by insurance companies, the use of Big Data to improve claims processing, an increasing demand on cyber insurance, the emergence of Peer-to-Peer insurance, and a growing focus on mobile applications for interaction between insurers and their customers.
Today’s customer uses the Internet to source quotes and research insurance companies to check for the best deals, yet research shows that most insurance purchases are still happening telephonically or through in-person interaction. Insurers are coming around to the fact that customers prefer online interaction, and are realising the need to adapt their systems accordingly. We will be seeing the progressive simplification of legacy systems to remove the barriers that hinder them from offering a consistent and seamless customer experience.
As the trend for connected and smart devices continues to grow, IoT is fast becoming a transformational driver in insurance industry. Several auto insurers have implemented new models based on vehicle telematics. The possible applications of connected devices across the industry are extensive and have the potential to revolutionize claims processing, product pricing and fraud detection. Auto insurance industry still worried about the future of insurance connected cars and driverless cars as the manufacturing advancements are going to reduce the risk and there by premiums for insurers. Industry predicts that Auto insurance premiums will go down significantly in the next 10 years due to customer behaviour changes and manufacturing advancements in the industry.
Virtual adoption across the insurance industry has also been vast, and many insurers are actively using or implementing virtual computing for operational flexibility, function standardisation, cost savings, scalability and business agility. Small to mid-market insurers have been seen as early adopters of virtual computing services, which is enabling the ability to deliver faster claims, policy and billing services.
Insurers are facing an all-time low retention rate, backed by growing customer demand and rising concerns about cyber-crime. By not capturing and extracting data accurately, insurers are not able to assess their business positioning and the associated business risks fully, including security breaches. Insurers are being forced to make operational changes which will enable them to make better use of their data, for the purpose of retaining business and staying ahead.
Traditionally insurance is sold than bought. With advancement in technology customers have multiple options and they are demanding changes in the behaviour of insurers to have multiple touch points now compared to the past. Insurers are migrating and upgrading their legacy systems, by automating and digitising core systems. Insurers are seeing the benefits of improved efficiency and customer interaction at multiple touch points. Legacy system transformation has been slow in Africa due to perceived high costs and lengthy implementation timelines. However, many are quickly realising that the longer they wait, the more customers they risk losing, adding to their lag behind competitors.
Insurance companies are embracing these trends and looking at more innovative ways they can attract and maintain customer retention. They are remaining up to date and very interactive with what is happening, even exploring radical game changing technology such as the blockchain.
Disruptive technology is creating new insurance services
With the advent of technologies like IoT, we are seeing an emergence of new services. Connected home technologies are enabling people to stay in touch with things like their home security systems, which is reducing risk for insurers who offer home insurance. Wearable technology is enabling health insurers to keep real-time tabs on the health and wellbeing of their customers, again mitigating risk.
We are seeing the biggest impact in the use of Big Data, though. Insurers are discovering the multiple benefits that the wealth of information available from sources such as social media is delivering. Using this information, they are able to tailor their products based on customer preferences and even offer customised rewards programs, increasing sales and customer retention significantly. It is also enabling easier and more streamlined claims processing, as information is recorded, and centrally stored and accessed.
Of course, the mobile trend, particularly in Africa, is making possible the use of apps, not only to smooth insurer and customer interaction, but also to track things like customer fitness, health and even wealth status. Applications are opening up a world of possibility for insurers everywhere.
Insurance in Africa vs the World
In South Africa, lot of importance is placed on things like life insurance, private medical aid car insurance. The rest of Africa, however, sees insurance as less necessary. This means that insurers who operate in Africa need to be more agile, identifying ways in which they can appeal to the African market and delivering them with speed.
Quick, Easy, Instant, Flexible Insurance is very attractive to the African market. An example of such an initiative is currently being investigated by a South African Insurer who is moving into the Nigerian market. They identified a need for taxi drivers to have medical and insurance cover specifically for while they are in transit. Taxi drivers will be able to purchase insurance making use of USSID or a smart phone application enabling cover only for the time that they are travelling from collection point to destination – an attractive and cost effective proposition for the transport business
This is just one of the many ways in which insurance is changing and being impacted by technology. Insurers, typically entrenched in tradition thanks to its association with stability and reliability, do need to realise that the market has changed. It’s time to embrace technology and disrupt the way insurance works for longevity.
CES: Most useless gadgets of all
Choosing the best of show is a popular pastime, but the worst gadgets of CES also deserve their moment of infamy, writes ARTHUR GOLDSTUCK.
It’s fairly easy to choose the best new gadgets launched at the Consumer Electronics Show (CES) in Las Vegas last week. Most lists – and there are many – highlight the LG roll-up TV, the Samsung modular TV, the Royole foldable phone, the impossible burger, and the walking car.
But what about the voice assisted bed, the smart baby dining table, the self-driving suitcase and the robot that does nothing? In their current renditions, they sum up what is not only bad about technology, but how technology for its own sake quickly leads us down the rabbit hole of waste and futility.
The following pick of the worst of CES may well be a thinly veneered attempt at mockery, but it is also intended as a caution against getting caught up in hype and justification of pointless technology.
1. DUX voice-assisted bed
The single most useless product launched at CES this year must surely be a bed with Alexa voice control built in. No, not to control the bed itself, but to manage the smart home features with which Alexa and other smart speakers are associated. Or that any smartphone with Siri or Google Assistant could handle. Swedish luxury bedmaker DUX thinks it’s a good idea to manage smart lights, TV, security and air conditioning through the bed itself. Just don’t say Alexa’s “wake word” in your sleep.
2. Smart Baby Dining Table
Ironically, the runner-up comes from a brand that also makes smart beds: China’s 37 Degree Smart Home. Self-described as “the world’s first smart furniture brand that is transforming technology into furniture”, it outdid itself with a Smart Baby Dining Table. This isa baby feeding table with a removable dining chair that contains a weight detector and adjustable camera, to make children’s weight and temperature visible to parents via the brand’s app. Score one for hands-off parenting.
Click here to read about smart diapers, self-driving suitcases, laundry folders, and bad robot companions.
CES: Tech means no more “lost in translation”
Talking to strangers in foreign countries just got a lot easier with recent advancements in translation technology. Last week, major companies and small startups alike showed the CES technology expo in Las Vegas how well their translation worked at live translation.
Most existing translation apps, like Bixby and Siri Translate, are still in their infancy with live speech translation, which brings about the need for dedicated solutions like these technologies:
Babel’s AIcorrect pocket translator
The AIcorrect Translator, developed by Beijing-based Babel Technology, attracted attention as the linguistic king of the show. As an advanced application of AI technology in consumer technology, the pocket translator deals with problems in cross-linguistic communication.
It supports real-time mutual translation in multiple situations between Chinese/English and 30 other languages, including Japanese, Korean, Thai, French, Russian and Spanish. A significant differentiator is that major languages like English being further divided into accents. The translation quality reaches as high as 96%.
It has a touch screen, where transcription and audio translation are shown at the same time. Lei Guan, CEO of Babel Technology, said: “As a Chinese pathfinder in the field of AI, we designed the device in hoping that hundreds of millions of people can have access to it and carry out cross-linguistic communication all barrier-free.”
Click here to read about the Pilot, Travis, Pocketalk, Google and Zoi translators.