By Renee Bonorchis
Customers changing how they interact with insurance companies
Industry faces more disruption than any other, PwC says
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South Africa’s biggest insurers are considering technology and telecommunications partnerships as they seek ways to improve earnings to counter increased competition and a slowing economy, according to PricewaterhouseCoopers LLC.
“There are a few tie-ups being worked on,” Victor Muguto, PwC’s long-term insurance leader for Africa, told reporters in Johannesburg on Wednesday. “The driving force is that, if you look at the top four insurers in South Africa, they are mostly older than 100 years and have significant legacy issues. The future is about knowing your customers and being able to profile them.”
With companies like Google Inc. able to aggregate and compare insurance quotes, the biggest insurers worldwide are under pressure to retain clients and sell policies to increasingly tech-savvy consumers. South Africa’s four biggest insurers are Old Mutual Plc, Sanlam Ltd., Liberty Holdings Ltd. and MMI Holdings Ltd. Their earnings growth has slowed, eroded by volatile equity markets, a declining rand and low interest rates.
“The African continent is very suited to change and the uptake of mobile technology is exponential,” Muguto said. “Not many insurers have a one-customer view yet,” he said, adding that, as an example, life insurers can’t always see what their customers are doing when they interact with the same company’s asset management unit.
“Insurance is undergoing more disruption than any other industry,” Stephen O’Hearn, PwC’s global insurance practice leader, said in the same presentation. “It’s a tremendous opportunity for insurers to differentiate themselves. I foresee more tie-ups with telecommunications companies. The insurance industry also has the opportunity to tie up with emerging tech companies and they can then separate themselves from the pack.”