IIG Insights - Fintech
#YourIIG hosted another excellent event at GIBS on 14th September 2017. The event was proudly sponsored by Discovery Insure, Guy Carpenter, Lombard, Marsh and Santam. The topic which is on many a company strategy was Fintech, or more accurately from an insurance perspective - InsureTech.
Our master of ceremonies was the winner of the 2016 Insurance Apprentice, Kabelo Paile, who was also part of the IIG Class Of group in 2015.
Our first speaker, Ian Gatley, who is Head of Data Management at Lombard provided interesting insights into how technology to a great degree has had an impact on the way we live. Inventions such as SIRI are now able to provide comparative insurance quotes (and not only to talk to you about the weather!).
Tesla Motors has provided independent studies that have shown that since introducing vehicles with semi-autonomous mode, their accident rate has come down by 40%. Tesla has also started including insurance in the cost price of the vehicles as they do not believe traditional insurers correctly understand the risks.
Audi, BMW and Mercedes-Benz are manufacturers that are surely considering these strategies in SA: we already have the self-parking Opel Adam that sells for under R250,000.
The insurance industry is and will continue to be disrupted; Gatley advises that driving these changes are a variety of forces including social media, mobile technology, information and the cloud. Companies disrupted in other industries who were arguably slow to react have seen their market share lost to more innovative competitors. Example include Blackberry and Nokia in SA; conversely the tobacco industry saw the writing on the wall and started to invest heavily in Vape companies. They chose to disrupt themselves rather than be disrupted added Gatley.
Next up was Executive Head of Operations and IT at Santam, Kevin Wright, who provided information on actual market research conducted by Santam into the Impact of Digital on Intermediated Consumers. There were two key insights highlighted, namely clients wanted to use different channels at different touch points and, customer engagement is changing.
Regarding the first key insight, customers preferred different channels when it comes to finding information, purchasing product, servicing existing policies, and of course claims. In some instances the internet may be the channel, in others however they want to speak to someone on the telephone. It’s clear that digital affects every aspect of the value chain, he explains.
Vicky Botha, Head of Digital and Solutions Architect at Discovery Insure was our third speaker. She also emphasized that tech companies will continue to disrupt many industries, not only insurance. She quotes from a PWC study that says, “Even though 74% of insurers see on-going sector-wide innovations and can identify the hot trends, the majority are not yet considering new forms of improvements to address disruption.” She defined FinTech as: “Computer programs and other technology used to support or enable banking and financial services, making them more efficient”. She furthermore defined InsureTech as “a set of innovative business models and platforms that bring in new customer experiences by applying innovative technologies in the insurance industry”.
InsureTech allows for instant cover solutions, self (automatically)-approved claims and the ability to service one’s own policy.
Risk rating, underwriting and product development will be sorely influenced as increased connectivity, more data and information, and Big data analytics become more of a reality. Peer to Peer insurance, robo-advisors and online sales are common terminologies that insurers need to contend with and consider strategies to address.
Botha went on to point out that insurers need to respond to the rapid rate of change. Some strategies may include driving a culture of innovation and customer experience, or to have the ability to implement partnerships quickly.
Insurers also need to leverage big data capabilities – collection and storage, analysis, and exporting the data for the insurance company will become crucial.
The event closed with the 120 strong audience having the opportunity for a question and answer session.
We would once again thank our sponsors: Discovery Insure, Guy Carpenter, Lombard, Marsh and Santam for the generous sponsorship which makes these events a possibility.