BY JADIAH MWARANIA
The insurance and reinsurance industry has no doubt been greatly affected by the global pandemic. Just like other businesses, reduction in sales and revenue has been felt across board.
This should not destabilise the insurance and reinsurance industries at all. As a matter of fact, this is the time for insurers and reinsurers to come together and improve the state of the insurance industry through innovation enhanced by the learning and opportunities as well as threats posed by the Covid-19 pandemic.
Customer service is at the heart of the insurance industry operations and this would be a fantastic time to revamp and improve online claims processing portals to better serve customers.
Not only will this enhance claims settlement and offer convenience to customers, but it will also help amplify digital portals to ensure that they are effective and efficient.
Improvement on payment methods whether through M-Pesa, Electronic Fund Transfer (EFT) or Real-Time Gross Settlement (RTGS) should be improved and made as simple as possible in order to ensure payments are simpler and quicker to make.
This is an ideal time for reinsurers and insurers to intensify their research efforts in order to better profile and understand their various target clients. The moment is great for the industry to utilise data analytics to measure targeted audience’s delight that will help when it comes to cross selling and general sales.
This is an opportune time to engage with customers and leverage on technology through social media, mobile apps, SMS and other channels to better connect and reward the valued customers.
PricewaterhouseCoopers (PWC) in its Insurance 2020 report notes that macro-environment factors will largely affect personal insurance, commercial insurance, individual life, annuities and retirement.
In personal life, the report predicts greater commoditisation, decreasing profitability, automated underwriting, and greater loss control. There will be more transparency in pricing and direct purchases by-passing intermediaries.
Apart from the developed world, emerging markets will adopt automation for real time underwriting. Real time data will have great impact on commercial insurance as it will focus on providing standardised products with high value added services.
The virtual business affinity groups will emerge using availability of information enabling them to network and pool risks. Use of blockchain technology and cloud computing will be up scaled in the insurance industry.
These technologies are aimed at reducing risks of fraud and help to digitally track information in a simplified manner. At the same time, there will be need to upgrade technology to effect the new insurance contracts accounting due on January 1, 2023 as provided in the International Financial Reporting Standards (IFRS) 17. Industry players will have to be cognizant of these issues and ultimately put in place business strategies to meet market expectations.
Some of the biggest barriers to insurance penetration is low awareness of insurance and reinsurance offerings, substitutes to risk mitigation, poor market orientation and increased fraud within the industry.
In my view, this is a good time for the insurance industry players to come together to craft educative campaigns that target various publics. It is time that the industry showcases to Kenyans how insurance and reinsurance solutions could benefit them.
It is also time that the industry improved media capacity when it comes to reporting on insurance matters so as to disseminate clear, accurate and understandable insurance messaging. Strategic partnerships within the industry could improve this and help more Kenyans make more informed decisions on consumption and value of insurance.
In countries such as South Africa, insurers and reinsurers have continuous educational campaigns that have led to higher awareness levels.
This knowledge has created a demand for not just the middle class and upper class but has also created the need for insurance products that cater for the low-income earners that are as cheap as $7 per month.
In India, the increased knowledge has led to the demand for products that target those in rural areas, and in Namibia, the high awareness levels has led to increased uptake in urban and rural areas giving the industry more product variety that helps more customers protect what they value through insurance solutions.
Kenya has the potential to grow its insurance industry, diversify product offerings and help more Kenyans invest, protect and grow through the use of insurance solutions.
This will be possible with increased collaboration and stronger solidarity between various insurance industry players even as we go through these tough economic times brought about by this unexpected Covid -19 pandemic.