The recently-released KPMG South African Insurance Industry Survey for 2021 has highlighted the role of disruption and innovation, with the majority of CEOs surveyed stating that they are looking to get on the front foot with regard to these twin challenges.

Some two thirds of CEOs indicated that they will thus seek to increase investment in disruption and innovation processes. Recognising that the major driver of innovation and disruption is digitisation, some 70% of CEOs have noted that new partnerships will be critical to continuing the pace of digital transformation.

According to Mark Danckwerts, partner: KPMG Africa insurance practice leader, Covid-19 has been a major driver of digital adoption, even as it has played havoc with the insurance industry across the board. Examples of the disease’s impact include the fact that life insurers are now debating vaccine mandates for employees, vaccine premium adjustments for policyholders and questions of repricing policies to recoup some of the losses incurred over the recent period.

“Meanwhile, in the non-life insurance industry, premium relief measures were provided by many to their customers, including premium holidays, delayed pay-back, debit order leniency, reduced premiums, and the like,” states Danckwerts.

“On the claims side, we saw a reduction in the motor claims ratio as a result of lower usage of motor vehicles, working from home, and alcohol bans and curfews. However, we saw a much larger increase in business interruption claims, trade and consumer credit insurance was impacted severely, and directors’ and officers’ liability insurance claims increased in frequency and severity.”

What this means, he adds, is that if the insurance industry hopes to not only keep pace with a rapidly changing society, but also provide customers with the kind of offerings that meet these evolving needs, it needs to optimise digital advancements in order to keep pace with emerging risks.


In the short term

A great example of how to achieve this balance can be seen in the collaboration between leading insurer MiWay and mobility risk intelligence innovator, Zendrive, together with systems integrator Digital Solutions Group (DSG). These three companies have entered into an agreement that places South Africa at the forefront of mobility innovation.

Yaron Assabi, CEO and Founder of DSG, explains that the Covid-19 lockdowns led to idle cars, which in turn raised consumer demands for fairer motor insurance models that reflect their daily driving habits. Insurers and customers alike have been searching for better pricing models that improve insurers’ margins, while reducing customers’ costs, he explains.

“DSG helped integrate MiWay and Zendrive in order to address these issues, through the creation of a new business model and customer value proposition, known as MiWay Blink. Powered by Zendrive’s leading mobility risk intelligence platform, MiWay Blink is a first-of-its-kind mobile app that enables customers to receive comprehensive car insurance, submit claims and earn monthly cashbacks, all via their smartphone,” he says.

The Zendrive technology embedded in the MiWay app allows them to detect when a client has been involved in an accident. This allows MiWay to send emergency services to their location immediately, continues Assabi, which, in cases where a driver is badly injured, could be genuinely lifesaving.

“Digital, behaviour-based insurance offerings are the future. We know that the insurance industry is experiencing a shift in customer preferences and expectations and that smart technology solutions can help set the pace of progress and respond to customer expectations. This relationship places South Africa at the cutting edge of the global motor insurance industry, representing the first step in an exciting future for South African motorists.”

But it is not only motorists that stand to benefit from the industry’s growing focus on utilising digital technologies to change business models.


Technology for life

Those in the life insurance space are turning to wearable technologies to allow them to gain a better understanding of consumers’ health and lifestyle habits.

This, in turn, means that insurers are better positioned to develop new products and more clearly understand the health of policyholders, while consumers now have access to the information, they require to take control of their physical and financial well-being, suggests Anton Keet, Head of Risk Services at 1Life.

By analysing lifestyle data along with currently used underwriting data, underwriters can better understand health conditions and lifestyle habits that may affect mortality, he says.

“Wearable data today needs to deliver health insights about the customer that have more depth and insightful detail as well as provide accurate health information to the insurer – this enables them to significantly improve risk assessment. Similarly, it enables insurers to devise programmes that incentivise and reward the client for changes to their wellness profile, by providing them with incentives to maintain a healthy lifestyle.”

“Wearables are already very popular among certain demographics, and will only become more ubiquitous, going forward. Such proliferation will enable insurers to in turn develop more focused packages and comprehensive risk profiles, enabling them to strike a much better balance between value and cover,” concludes Keet.