Why technology is the key to insurance penetration

Insurance

With the Covid-9 pandemic, many people avoided congested places, thus opting to shop for insurance products online.

Photo credit: Shutterstock

Understanding why some products sell fast and others remain on the shelf for ages is key to aligning corporate strategies to winning customer product loyalty. 

Any discerning corporate knows such information can only be harnessed quickly and affordably through digital technologies that generate behavioural and spending patterns of individual customers, informing the way products are made, packaged and marketed.

Though a late adopter of the tech revolution, the insurance sector is also experiencing phenomenal changes—like the new e-motor insurance stickers that enable customers to use technology platforms to choose their preferred insurer and pay for the cover via mobile money.

Kenya’s mTek insurtech platform brings together 35 local underwriters to a portal, enabling customers to interact with insurance products, inquire about policies and file claims via the portal immediately after an incident occurs.

A podcast report, “Global perspectives on insurtechs”, by global advisory firm McKinsey & Company, insurtech is making things better, improving processes across the value chains of insurers. Its adoption is a win for the customers and corporates as it opens a 24-hour window for business transactions as opposed to the ‘8- 5’ working hours tradition.

Customer lens

“A lot of insurtechs are looking at data differently and looking at onboarding and the customer journey quite differently. Incumbents really look at products from a risk lens, and they price everything from a risk lens. But a lot of these insurtechs take a very deep customer lens.

And therefore, the way they build products and the way they price products is going to take into account a long- term horizon,” says the report.

Traditionally, Kenyans preferred physical interaction in business dealings, with cash and cheques used to settle payments. This raised the cost of doing business as parties had to meet at rented premises. It meant hiring of staff at offices in major towns while contracting commission agents elsewhere.

With the Covid-9 pandemic, many people avoided congested places, thus opting to shop for insurance products online. But thanks to insurtech, all processes are conducted and concluded online. Insurtech platforms provide foolproof ‘know your customer’ (KYC), PIN security and end-to-end transactional features. This hardly requires human interaction.

Social media, internet and GPS technologies all stashed into mobile phones has made collection of data easier and better. Thanks to market data, businesses are developing products that reflect customers’ wishes. They have ICT departments staffed with data scientists or contracted data analytics firms providing actionable customer feedback.

Insurtechs provide an important component in reducing claims owing to round-the-clock monitoring of insured assets, creating a sense of responsibility among customers. Their cloud platforms enable a wide reach and save users the need to travel while e-wallets also allow them to pay for products.

Ms Krogmann is the chief executive officer, mTek Services. [email protected]  @BenteKrogmann