The short-term insurance sector in South Africa has been slow to go digital. As a result, the sector is losing out on the Gross Written Premiums (GWP) opportunity estimated to reach R115.2 billion by 2020. This is according to the latest Accenture survey that focuses on the short-term insurance sector. By Staff Writer
The survey shows a clear customer preference for digital insurance solutions and readiness for digital engagement. About 80 percent of 1,500 insurance customers surveyed across South Africa are ready to purchase insurance products online.
Accenture believes that the R115.2 billion GWP opportunity is within reach for South Africa’s short-term insurance providers if they digitise their systems and apply essential strategies to address customer concerns and re-energise customer relationships.
Accenture has identified the five key strategic imperatives that will help short-term insurance providers to meet changing customer demands and create a foundation for participation in a fully digitalised business environment.
- Be smart
There is high awareness of digital offerings such as telematics, but usage is very low. Smart solutions such as connected homes, wearables, nearables and tracking algorithms, can present insurers with significant advantages. Telematics, a great example of a smart solution that can lower risk and costs for the insurer and customer, is a case in point.
- Be accessible
Customers are multichannel users who expect insurance providers to be accessible through the channels of their choice. Insurers that go digital, utilising a multichannel strategy, will position themselves well to meet customers’ needs. This is imperative as Accenture survey results show that only 20 percent of insurance customers feel that their insurance providers are easy and convenient to deal with. In fact, across the 13 industry segments in the survey, insurance companies ranked in sixth position, behind retailers, banks and car dealers in terms of ease and convenience to deal with.
- Be trusted
Trust and transparency are major concerns for insurance customers and should be given strong focus. Asked about the sharing of data, customers made it clear they are aware of the vulnerability of their data. They also recognise that using digital services inevitably increases their exposure. Customers are generally not comfortable to share even personal contact information, which most insurance companies already hold.
- Be responsive
To minimise churn and drive loyalty, insurers need to become more aware of customer needs and be more responsive, delivering solutions that are more relevant and tailored to individual needs. Insurers should address three key areas in which they are failing to meet customer expectations: efficiency of claims services, provision of value-for-money offerings, and the ability to let customers manage their policies in ways that suit them.
- Be relevant
Customers want personalised products and services that directly address their needs. The survey made it clear that customers in different age groups find different products relevant and attractive to them. For insurers to retain and grow market share, it will be important to understand these needs and present customers with tailored solutions via their preferred channels.