EMBRACING THE DOMINANCE OF DIGITALIZATION IN THE INSURANCE INDUSTRY
By Jonathan Marucha
In light of the global crisis, individuals worldwide have been adapting their work styles and lifestyles to seamlessly integrate into online and virtual environments. As a new year approaches, the way businesses utilize current digital communication trends will not only impact the experiences of their customers and employees but also their financial success. The insurance sector is experiencing significant transformations driven by the force of digital technology. Insurers are rapidly advancing technologically to keep up with the changing insurance landscape, which is reshaping customer interactions. Understanding the future of digitization in insurance and its benefits for policyholders is of utmost importance.
Digitization in the insurance sector entails leveraging technology to transform key business areas. The use of the Internet and mobile phones has seen remarkable growth worldwide. To attract a wider demographic of insurance customers, it is essential to capitalize on digital trends in the industry. One such trend is the Internet of Things (IoT), which allows insurers to access vast amounts of real-time data about policyholders’ lives. The IoT, a network of interconnected digitally enabled devices, enables insurance companies to undertake crucial initiatives. Leveraging this research opens up new opportunities and innovations in the insurance industry. The IoT exemplifies how current, improved data can drive the transformation of the insurance industry, informing underwriting policies and risk management procedures to mitigate insurance costs in the short and long term. IoT devices may include home security sensors, wearable monitors, and smartphones.
Motor insurance remains a significant contributor to the Gross Written Premium (GWP) for insurance companies across Africa. In countries like Kenya, driving a vehicle without motor insurance is against the law. Innovation, particularly through connected devices, is poised to transform this sector. Telematics, for instance, can transmit valuable data that insurers can leverage to create a comprehensive user profile. This data allows insurance companies to assess a potential client’s risk profile and other details, enabling them to customize a suitable plan.
Artificial Intelligence (AI) plays a vital role in developing computer systems capable of performing tasks that traditionally require human intelligence, such as visual perception, speech recognition, decision-making, and translation. AI enables insurers to assess risk, detect fraud, and reduce human errors in the application process. It imbues computer software with human-like behaviors, including learning, planning, and problem-solving. AI also offers advanced features like image and voice recognition. Insurers can utilize AI to provide personalized experiences to customers while catering to the high-speed demands of modern consumers. By incorporating AI, insurers can enhance claims processing turnaround time, streamline underwriting processes, and access more accurate reports within shorter timeframes, ultimately improving overall efficiency.
At Laser Insurance Brokers (LIB), we offer tailor-made and customized insurance products that are efficiently managed through our advanced digital processes. Our main objective is to help customers minimize their financial risks by providing appropriate insurance coverage and swift digital services. We operate through digital channels, heavily relying on technology to handle insurance policies. Rest assured, we’ve got you covered!
In my view, insurance companies that embrace technological advancements will continue to thrive, while others play catch-up. Digital technology has opened up exciting and convenient opportunities for consumers. Although innovation alone cannot guarantee the sustainability of insurers, it bears the most responsibility in achieving this goal. We have already witnessed some African insurance companies adopting digital changes to better serve their clients. Although it may take time to adjust, policyholders now have opportunities to save money, which was not possible through traditional methods.
The writer is the Executive Director of Laser Insurance Brokers (LIB).