By Craig Olivier, CTO of Genasys Technologies, as published in FIA Insights, May 2020
Click here to read on FIA Insights
Since the lockdown in South Africa and around the world, many insurance companies have approached us with an urgent need to digitise key aspects of their business. Clients must be enabled through self-service capabilities. In other words, they must be able to obtain quotes and purchase insurance without much intervention from the insurer.
More importantly, insurers want and need to be able to service their policies while registering and tracking claims, which, at the point of writing, is a major hurdle as most insurance teams are working remotely. Furthermore, companies are under added pressure at the moment due to an increase in claims, especially in travel and credit insurance, and must be able to provide adequate claims services.
This gravitation in the industry towards technology-driven efficiency is nothing new, but the COVID-19 pandemic has certainly moved things along rather swiftly. It has highlighted the need for partnerships in the industry in creating a sustainable insurance ecosystem supported by core platforms.
Above all, these systems need to give insurers the option to provide digital capability to the end customer.
The Insurance Ecosystem
When broken down to its essentials, an ecosystem consists of a core platform, such as the Genasys SKi® platform, the back bone that facilitates API connectivity both in and out of the system.
Feeding into this ecosystem is the Internet of Things (IoT) integration that supports parametric insurance, also known as event-based insurance. In other words, insurance cover at the press of a button, when and where you need it. Insurers are also waking up to opportunities in telematics, Big Data, data enrichment, and fraud management, which all serve to enrich the ecosystem. It exists and functions with the main aim of improving efficiencies and enhancing customer experience.
Real value is created not by technology providers trying to build every solution for each client, but rather to provide the technical ability to connect best of breed technology within an eco-system. In doing so, we support aspects of the insurance value chain. Many legacy platforms continue to be relatively closed and don’t facilitate innovation. The product offering to the customer needs to be reinvented and then supported by technology.
Many insurance companies are also giving back to communities by offering payment holidays and a potential reduction in premiums for a certain period, which calls for flexibility in their systems to account for payment holidays, for example.
Once we have got through this stage, we are also going to see additional regulatory requirements on insurance businesses to mitigate this type of scenario in future, which, again, emphasises digital system capabilities that are flexible and agile.
Most of the mentioned enabling capabilities are supported by the ability to create ecosystems that can integrate new technology into legacy frameworks, typically via business to business API capabilities. Having said this, potential is moot without adoption.
In March this year, I talked at the Cover Insurtech Conference about the Insurance Ecosystem, and touched on the culture of insurance technology adoption in South Africa.
For insurance technology, and so too the modernisation of the industry, to carry, this culture of adoption – and adaption – must be implemented at the top level and allowed to trickle down to the rest of the organisation. This adoption will be aided by the current environment which calls for ultimate efficiency.
Businesses need to clearly define their business objectives and leverage technology where it makes sense to do so. We have harped on about this, but technology implemented without proper planning and vision is almost always a massive waste of resources.
Large insurers have been forced to adopt innovative approaches to improve efficiency in their operations and their offering to clients, and we have seen insurance companies acquiring insurance technology solutions to bolster their existing value propositions.
Agility today is key. Businesses must produce innovative products in an extremely agile manner, and be able to test and fail fast. If the product doesn’t work, then the company must be agile enough to pivot as required, as we’ve seen during the pandemic.
A platform must be able to support an ecosystem that is pre-integrated and provides existing, and prospective, customers the option to select from a list of best of breed supportive technologies to assist with business objectives. An open platform that can integrate with innovative technologies is an ultimate enabler for agility, which is something every business should be aiming for immediately.