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Technology is reshaping the insurance landscape

IN today’s article, we revisit an article published on February 18, 2020.
In the wake of coronavirus, the significance of technology cannot be overemphasised.
Even organisations that had inertia to use technology have been mandated to do so because its use is inescapable.
Numerous technological breakthroughs have led to some considerable transformation of the insurance industry.
The traditional way of buying and selling insurance has significantly evolved over the last few years, benefitting both customers and insurers.
With increased investment in technological innovations, the industry is set for disruption.
Technology has considerably improved access to insurance, as well as convenience. The recent technological advancements in mobile technology have created more affordable opportunities for insurers.
They facilitate the distribution of products and services via mobile applications [Android, IOS and Unstructured Supplementary Service Data (USSD)] and manage their clients via online portals and dynamic websites.
It is transforming the industry from the traditional eight working hour style to a more robust 24/7 accessibility.
Another impact of technology is the creation of collaborative tools. More than ever before, insurance companies are now using Intelligent Virtual Assistants (IVA).
For many companies, across multiple sectors, IVAs have become an essential component of customer experience (CX), as mobile-based messaging becomes the preferred method of communication.
For insurance carriers, IVAs can be used to optimise customer experience, increase revenue, lower costs and enhance risk management.
For insurance customers, IVAs provide a simple, intuitive interface to access and navigate the full range of an insurer’s content and service offerings.
Technology has had a significant impact on customer service in the insurance industry. Insurers have tapped into the power of social media to market products and receive feedback from clients and other stakeholders.
Social media platforms such as Facebook, Twitter, LinkedIn, among others, have now become standard tools in many companies and has given insurance companies the power to respond around the clock.
While this has changed the dynamics of communicating to customers, it is a double-edged sword.
If there is negative news about a company, it can spread across the world at the speed of lightning.
In modern times making payments has becomes more comfortable than ever.
Most Insurance companies have leveraged on the penetration of mobile money platforms as a means of receiving premium payments and making claims payments. Mobile money is one of the rapidly growing services in sub-Saharan Africa.
Several companies provide platforms such as mobile applications where customers can make payment in the comfort of their homes or offices.
Other online payment platforms have improved service delivery.
Another critical improvement through technology is process automation.
Insurance companies are automating their processes, thereby increasing efficiency and cutting costs.
The idea of going paperless is one of the current buzz words in the insurance industry.
In Zambia, for example, issuance of manual insurance certificates and insurance discs is going to be the thing of the past very soon.
With the advent of technology, doing analytics has become easier than ever.
Most insurance companies are using archived and current data to help them in decision making.
“Data-driven” decision-making is cardinal in making the right decisions for insurers.
Another milestone with technology is the development of the Internet of Things (IoT), slowly becoming the new normal.
IoT is the network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors, actuators, and connectivity which enables these objects to connect and exchange data.
Each item is uniquely identifiable through its embedded computing system but can interoperate within the existing internet infrastructure.
A classic example on the application of IoT is in home insurance where smoke alarms are connected to detect any smoke in the house and immediately sends a signal to the owner. The case of Liberty Mutual makes a useful reference.
Liberty Mutual partnered with Google’s Nest to implement connected smoke alarms in the home, enabling customers to reduce the risk of a fire, and in turn, reduce their home insurance premiums.
Nest tells the customer where there is smoke or carbon monoxide, gives alerts on their phone, while the Split-Spectrum sensor looks for fast and slow-burning fires.
Liberty sends these US$99 Nests out to customers free of charge and will take up to five per cent off customer insurance premiums once installed.
It is an excellent example of IoT in insurance, pushing insurers to become lifestyle companies or advisers increasingly.
As Zambian insurance players navigate challenging economic times, technological innovations should be among critical priorities on the radar of insurance leaders. Technology creates opportunities that can enable insurers to become more customer-centric, facilitate data-driven decision making, improve their pricing and create operational efficiencies.
This topic is comprehensively covered in my book, “Basics of Insurance, The Zambian Experience: From Local to Global’, a book which won the 2018 African Insurance Organisation (AIO) best book award; available on Amazon and leading local book shops across the country.
For comments or questions, email or or visit the Facebook group; Insurance Platform or follow me on LinkedIn on my Facebook page.