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Picture: 123RF
Picture: 123RF

The Covid-19 pandemic has highlighted the demand for digital insurance products and accelerated the development of customised offerings by traditional and digital-only insurers. 

Consumers want the convenience of choosing when and how they interact with a product or service, as they already do when they use other financial and travel services. They have also become more attuned to their real insurance needs as the pandemic helped to remind them what is important. 

Meanwhile, the increasing availability and application of digital technologies such as the Internet of Things (IoT), artificial intelligence (AI) and blockchain provide insurers with valuable and dynamic data that lets them bring innovative offerings to the market.

The new generation of insurtech companies is driving the traditional insurance sector to transform. They are also proving to be valuable partners to traditional insurers who want to provide digital products and services. All these factors are working together to form a dynamic, digital insurance marketplace.   

Local consumers demonstrated their appetite for digital insurance products and processes in the past two years when they used online and mobile channels to complete their claims with institutions like Standard Bank Insurance. 

This digitalisation of the insurance process has made on-demand, usage-based and parametric products viable, as insurers are using dynamic data to offer customers personalised premiums and products. This is in contrast with the traditional, one-size-fits-all insurance offerings of the past that were based on static data. 

Technology driving digital offerings

One of the technologies transforming the insurance industry into a sector with a digital, personalised offering is IoT — the interconnected global web of digitally enabled devices.

IoT gives insurers access to a large amount of real-time data, including on policyholders’ lives, which helps them offer tailor-made products to their customers. Advanced analytics also plays a role in digital insurance as it involves parsing vast amounts of data to deduce what individual consumers need.

In the digital insurance world, the goal is to develop a personalised insurance engine that considers consumers' unique characteristics, such as their web history and device usage — with their permission and subject to privacy and data protection guidelines. That information can feed into product recommendations and help AI-based chatbots answer consumers’ questions. An example of this is where price-conscious consumers are offered usage-based insurance or auto insurance products that reward safe driving.  

Many insurers around the world are already using telematics to provide more customised auto insurance products. The wider adoption of IoT will result in more innovation in life, health, property and commercial insurance, as IoT devices help customers provide a more accurate view of their needs. This means their insurers can better understand risk.

What makes this even more exciting is that the technology gives the insurer an ongoing view of the customer's needs and preferences, enabling it to provide innovative services in real time. 

Local innovation

Standard Bank has adopted a digital insurance business model to stay true to its value of customer-centricity. Standard Bank Insurance is well on its way to using the latest technology to provide insurance products to its customers: it already employs telematics in its car insurance offering, and it offers platform services via the enhanced Standard Bank Insurance app.

The bank's customers are taking charge of their insurance portfolios, policy updates and claims processes through online channels. This is driving the rollout of more modular insurance offerings to the local market to continue catering to customers’ individual needs. 

Standard Bank has recorded a rise in online claims from a short-term perspective to 1,988 in the course of the second quarter of 2022 and 1,880 life-policy claims via WhatsApp. 

This is in line with international trends to allow customers to build their own insurance packages that meet their needs and often save them money. It is an exciting development for consumers and the industry, as modular solutions can easily be integrated into other IoTs. This supports the development of big data, which will enable agile insurers to serve up more tailor-made solutions.  

The use of leading technologies allows insurance institutions like Standard Bank to support customers with relevant, updated offerings in the long term by using dynamic data to adapt their offerings to their clients’ changing circumstances.

The bank will continue to find effective ways of providing relevant products and channels for customers. The changing insurance sector will create long-term value for consumers in this way.  

This article was paid for by Standard Bank.