KOKONYA: Why innovation is key to growth of insurance industry
9 months ago, 7 Mar 15:22
Innovation is a powerful tool of staying relevant and moving ahead of the rest in the ever evolving consumer market. It can do the same in insurance even as new and well-funded technology-based start-ups pose a real threat to industry giants. Thanks to the proliferation of smartphones and other software development tools in Africa, we are seeing the emergence of innovative digital platforms that offer users and potential clients better information and transparency. Insurance companies that leverage on some of the technological advances will continue to thrive as the rest play catch up. Technology has unearthed opportunities that are not only exciting to consumers but also convenient as far as adoption and servicing go. A number of insurers in Kenya have apps for clients. In February, Jubilee Insurance launched JubiCare and JubiAgent, the apps that allow self-service using smartphones. Jubilee Insurance #ticker:JUB also integrated Artificial Intelligence into their Facebook Page through the use of a chatbot called Julie, its Live Intelligent Expert who answers queries. This means faster and efficient service delivery. Data also informs decision-making across industries. Data technology has in the recent past transformed risk which is the primary element of the insurance business model. Technology has changed the way data is created, captured, analysed and stored. Insurance firms have many sources from where they can collect data and help create important and personalised products, helping in the management of risk. International Data Corporation estimates that the digital universe will double in size every two years. This will create a large pool of data attributes from which insurance companies can acquire meaningful data that will influence decisions in product designs, risk management, fraud reduction and tailored premiums. A myriad of breakthrough technologies in this industry are set to spur significant growth and transformation and players must change with the tide or prepare to close shop. These include Internet of Things, Telematics, Digital platforms, Blockchain technology, Artificial Intelligence and Cloud Computing. Apart from product development, the technologies provide and and modify business models. The Internet of Things (IoT) is the perfect example of how new, better and current data will help define the insurance industry’s transformation. This data will inform the underwriting policies and risk management procedures that will help reduce the cost of offering insurance both in the short and long term. IoT devices may include phones, home security sensors, and wearable monitors. Motor insurance continues to be a major driving factor and an important contributor to the Gross Written Premium (GWP) for insurance companies across Africa. In Kenya, for instance, it is against the law to drive a vehicle without motor insurance. While this does not apply in all countries in Africa, this is an area that is set to be transformed by innovation especially using connected devices. Telematics can help transmit important and valuable data that can be leveraged to get a complete user profile of an insured. Through this data, insurance companies can then assess the risk profile of a potential client in addition to ...
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