Understanding disruption in insurance

Disruption is a term used increasingly often in a digital environment. But what does it mean for insurers looking to differentiate themselves from the rise of agile insurtechs and fintechs? Jaco Swanepoel, founder and CEO of SilverBridge, examines the impact of disruption in insurance.

Disruption refers to a process that breaks or interrupts the normal course of action or the continuation of some activity. And when it comes to defining it in a digital context, it talks to the use of technology to shake-up an industry with ground-breaking new products and processes. Sometimes, it can even result in the creation of an entirely new industry segment.

For example, think about how mobile devices have disrupted the television industry. Some people have become so comfortable to stream video content to their mobile phones and tablets, that many millennials prefer these over big screen televisions. This has resulted in TV manufacturers being ‘forced’ to become more innovative in how they package screens and displays.

“Of course, in insurance, this involves more than just hardware, software, and the bits and bytes of what is happening around us. Meaningful digital transformation requires combining technology with powerful ideas that was not possible before and thereby creating new opportunities,” says Swanepoel.

In practice

At their core, insurers focus on meeting customer expectations to manage their risks. In a digital world, people want increasingly more intuitive, user-friendly options to fit into their real-time lifestyles. Whether that is 24-hour access to relevant information to manage their risk or use mobile apps to submit and resolve claims that are processed automatically with no agent interference, the ways insurers deal with people and manage the business have changed.

Research has shown by introducing automation, an insurer can reduce the cost of a claims journey by as much as 30%. Considering how tight budgets have become and the importance by finding subtle ways of improving the customer journey, this is a significant number. Furthermore, the reduction in size of devices have turned mobile phones into what can be considered portable computers.”

This means insurers (and consumers) can harness new opportunities to reinvent what has come before. An entirely new ecosystem is emerging that is driven by digital customer engagement. No longer do insurers have to exclusively rely on agents for user interaction. They can leverage mobile apps to provide a continually evolving set of products and services catering for more innovative ways of analysing customer data and market trends.”

People first

Much, if not all, of this is centred around a people-centric design. Customers want ease of use and want insurance to become a significantly more intuitive experience.

“So, even though technology is making all this possible, it only enables insurers to embrace disruption. It should never be the be-all and end-all of everything. The person remains at the core of the insurance experience.”

Another example is how some insurers rely on automation for the customer sign up process. By simply providing basic information, a user can have immediate access to full personal cover and submit photos of their insured items from an insurance app. From quotes to claims, the bulk of the insurance journey becomes automated thanks to better data analysis and artificial intelligence that deliver a more efficient way of customising products on a per user basis,” adds Swanepoel.

However, Swanepoel advises that the insurance approach must remain cognisant of identifying new opportunities instead of simply overhauling traditional processes.

“It is all about taking digital disruption and making it concrete and measurable in the hearts and minds of people. The customer should experience this as an improvement and not as a shock unless it is a positive one. It must demonstrate returns to all stakeholders and not just be technology for its own sake. Only then will companies be empowered to start reinventing how they manage insurance,” concludes Swanepoel.

About SilverBridge

SilverBridge has over 24 years’ experience as a leading provider of insurance software solutions in the African financial services industry. Our experience includes working with over 60 customers across 16 African countries. SilverBridge’s digital insurance suite allows financial services companies the opportunity to respond quickly to changing markets. With customers throughout Africa, SilverBridge has the knowledge, experience, and technology capabilities to help its clients do better business.

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