Digital Insurance in Africa – Happening now

What is digital insurance?

There is a lot of excitement around digital insurance and with this hype comes an element of confusion on exactly what is meant by digital insurance.

For me digital insurance is the opportunity to apply digital thinking, and the associated technologies, to transform insurance business models and deliver more value to the consumer.

Customers are in the driving seat

Customers haven’t changed – they are looking for insurance products to protect themselves and their families. They want good value for money but more importantly want insurers with high levels of integrity who meet their promises on claims and provide great customer service.

What has changed though is customer expectations and purchase behaviours. With the exponential growth of smartphones consumers are experiencing delightful and engaging new ways to discover and consume products and services.

Industries with products that can be consumed and purchased digitally all have been transformed– just look at how the publishing, music and video industries have been turned upside down. We have also seen the distribution of physical products such as taxis (Uber) and room accommodation (Air BnB) transformed by companies who can create new eco systems that are asset “lite” (neither Uber nor Air Bnb own the core physical assets around which their business is run).

So is insurance different? No – Insurance is an intangible product,, a promise transformed into a legal contract, and as a result is also open to transformation by digital thinking. Reluctance to change and unfavourable regulations maybe can be cited as barriers to change but these are likely to be speed bumps as opposed to roadblocks.

Slowly but surely existing industry incumbents and new challengers from outside of the industry are starting to grasp the new opportunities – the pace of transformation is quickening.

What are the opportunities in digital insurance?

There are so many opportunities available so I will restrict myself to the top 5 areas that most interest me at the moment:

  • Digital thinking to transform face-to-face sales of life insurance: We can use digital thinking to radically improve the productivity and professionalism of agents
  • New entrants will be successful brands with digital, and low cost, connectivity to their customers. We can, and are seeing new entrants from airlines, telco, retailers as well as the internet giants. And as insurance is extraordinarily diverse in its risk protection offering there are plenty of niche ecosystems in which insurance can be embedded. In China you can buy insurance to protect against the theft of virtual assets!
  • Telematics and the internet of things will transform insurance. Whether it is telematics for the car, home or the body the emerging devices offer the opportunity of better pricing, reduced risk and increased customer engagement
  • Big data and analytics will start being used effectively in insurance soon. Generally speaking, the insurance industry is currently struggling to maximise the value of the data it already has. New entrants will bring in skills, expertise and customer connectivity that help to provide a path from what can sometimes seem rather theoretical predictive models to more action orientated and dynamic models based around a combination of observed customer engagement , past history, insurance policy and algorithm based offer engines
  • Moving to Smartphone centric business models. It is surely only a question of time before product and services that are mobile first, or mobile only, will be launched. Smartphones are where digital payment, fulfilment, offers and engaging content intersect and come to life in the hands of the consumer

I am sure you have your own list and the exciting thing is that this is a moment in time where experimentation, and making calculated investment in digital business models, is far less risky than maintaining the status quo.

Africa can be at the forefront in digital insurance

I am quietly confident Africa will become a hotbed of digital innovation in the insurance industry. Why is that? These are my reasons in no particular order:

  • Success of mobile money initiatives in many markets in Africa has created a payment platform ideal for insurers to use
  • Large countries with growing populations and increasing wealth provide scale economies to insurers going forward
  • Rules and regulations in Africa have been shown to be favourable to innovation in financial services in many countries
  • Lack of insurance penetration in many countries means that needs for insurance have not been satisfied
  • History of insurance innovation in South Africa in particular provides a platform to build on

The first conference on Digital Insurance in Africa

I am looking forward to visiting Africa to attend its first dedicated conference on digital insurance in Johannesburg on 5-7th August. This conference has attracted more than 15 experienced speakers from the region who will provide their on the ground perspective on digital insurance and how to take advantage of the opportunities available.

I am looking forward to meeting and discussing digital insurance with attendees as well as participating in the conference as speaker, panellist and workshop leader.

Hugh Terry

Hugh Terry

Hugh Terry 

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