In times of change, we often mistakenly identify the catalysts of this change, and focus our energies on addressing these catalysts.
That does not necessarily mean we are doing something specific. We may just be deflecting the change through reasoning. We may also tell ourselves that the change will not affect us.
The ingredients of change
A catalyst only sparks change; the ingredients are already present. Further, if you look at those more closely, you can see why change is afoot.
In the case of financial services, particularly insurance, the reason for the change is obvious: customers are dissatisfied.
Spotting potential in a system is not hard; you just need to measure the levels of inefficiency, and there is a lot of inefficiency among insurers. Claims are notoriously slow and convoluted. This is often coupled with overlapping burdens of documents from the customer, not to mention poor communication during the process.
Professionals will respond by citing fraud; yet, the onerous claims process exists to reduce such risks. But this is the crunch: customers do not care. They are more concerned about the speed of the transaction, counter balanced by the amount of premiums they had paid the insurer.
The star of the dish
The above challenges are the ingredients for change. The star of the dish (the catalyst of change) is technology. Technologies such as blockchain (which acts as a trust intermediary for transactions), and intelligent automation of processes are giving financial institutions much better ways to interact with their clients.
For example, chatbots are increasingly being used to help with claims. They rely on automated processes and intuitive customer interfaces on apps and websites to gather information and process claims quickly.
This trend is not just about addressing problems; it is about opening new avenues. By using artificial intelligence and automation, it is much easier to know customers as well as offer more niche products.
The dessert is amazing
The use of these technologies introduces new levels of scale and flexibility. A small brokerage can compete against larger rivals. By using data and analytics smartly, they can deploy relatively few resources to tailor products and gain a deeper understanding of their customer.
Another benefit of this approach is more cooperation among different sectors. A KPMG survey found that two-thirds of insurance CEOs see partnerships as major value drivers for the future. But those partnerships only flourish if all sides are taking advantage of new technologies.
If we are brutally honest, the insurance industry has grown complacent. Brokers often focus more on their relationship with insurers than with clients. Choice remains a scarce commodity, and customers operated at the pace of the broker/insurer.
This is rapidly changing across all professional industry sectors. Customers expect faster resolution, especially when they have already invested their money into the process by paying premiums.
That expectation can finally be matchedby new technologies that empower a new generation of brokers and insurers. South Africa’s insuretech start-ups are currently a small group. However, the processes and customer interactions they are mastering will inevitably be broadly adopted. Customers will see that and the savings from efficiencies will cement those efforts into business models.
The good news is that these new tools are much more affordable and adaptable than past systems. Small, flexible players are well- suited to adopt the new norm and join the new bloods of the insurance world.
All the possibilities of this new era are within reach, many just do not realise it. Instead, they are fooled by their faith that the change will not affect them. However, unless you are sure your customers are entirely happy, it absolutely will affect them.