By Tafadzwa Chidoori
ILO Impact Insurance recently published the 2016 Impact Insurance Forum Summary Report, where it indicated that insurance companies should go digital or face the risk of going out of business.
This year’s Forum was held in Colombo, Sri Lanka, in November 2016 and focused on the theme “Becoming a digital insurer” and was attended by more than 80 participants from insurance and reinsurance companies, enablers, donors, and government agency representatives
Speakers at the forum indicated the serious need for insurers to digitalise to remain competitive.
According to the report Krishnan Venkatachalam (Head of Microinsurance at AIG) highlighted that insurance companies that do not go digital will not stay in the market much longer.
Krishnan indicated that going digital is a need rather than a choice, insurance companies should be able to meet the ever changing customer expectations.
Quentin Gisserot (Project Manager at AXA Group, a global insurer) underlined that digital tools where changing the paradigm on insurance. Digital tools are disrupting the insurance market and insurance is no longer about just a risk carrier.
Going digital is the only way to reach the vast majority of people who are insured.
Munir Duri (CEO of Kifiya, an Ethiopian digital services provider) highlighted that in Ethiopia , Kifiya’s mission is to simplify and improve the lives of Ethiopian people by making insurance transactions simple, affordable, secure and within reach.
“The idea is to develop adequate products, manage processes efficiently and distribute products in an accessible way.”
Going digital is however not a smooth transition Africa has a very large rural population the major question is “how can a company convince rural clients that are usually not that connected, to go to a website and buy insurance?”
Quentin emphasized the importance of partnering with trusted channels to tackle this challenge. One option, for instance, is to partner with mobile network operators (MNOs).
Insurance companies as shown in the experience of Kifiya also face a number of challenges in their bid to go digital, these include, “ designing an appropriate product that leverages digital technologies, making this product accessible to a customer that doesn’t have much experience with insurance, and changing the mind set of an insurance company.
To face these challenges insurance companies were urged to shire away from built-in systems and think about renting systems from those who already have the know-how.
Renting systems, finding a trade-off between technology and the customer interests, creation of partnerships to was key in avoiding reinventing the wheel and would enable players in the insurance industry to leverage the know-how that is already available on the market.
The Impact Insurance Facility is housed at the International Labour Organization, it enables the insurance industry, governments, and their partners to realise the potential of insurance for social and economic development. The Facility was launched in 2008.