When most of us think about technology and financial services, we think about the latest mobile banking apps or Mobile Money and online banking. We only associate financial services with banks and fin-techs, not with services like insurance, and yet this is an area that is consistently growing and provides tremendous opportunities for insurers and savvy entrepreneurs.
We can categorize InsurTech as a subset of Fintech. So, what is InsurTech? This is the technology that lies behind the creation, distribution and administration of insurance business. InsurTech is transforming the insurance industry with new technologies to improve customer experience, simplify policy management, design relevant products and increase competition.
In Uganda, insurance, in particular, presents over 90% market growth opportunity. In 2019, the sector recorded a 12.47% increase in Gross written Premium from Ugx 856Bn in 2018 to Ugx 962Bn. Non-Life (General) Insurance continues to dominate holding 64% in market share, Life Insurance 28%, Health Membership Organizations 8% and the rest held by Micro insurers.
Inspite of this consistent growth, the industry continues to grapple with consumers who do not really understand it or its benefits and therefore are not consuming as it much as they should. This presents a unique opportunity for InsurTechs who have it within their reach to provide solutions that close these and other gaps. We will primarily look at 3 things InsurTechs should keep in mind when building solutions for this industry.
- Customer engagement:.
- The very nature of insurance, which is service-based, dictates constant interaction between customers and the insurance providers, regardless of whatever else is going on and especially in the advent of social distancing. Companies like FinChatBots are developing chatbots to help financial service providers acquire & retain customers thanks to AI-powered conversations. These bots help companies engage with customers in real-time, elevate their customer experience and improve user engagement.
In Uganda, The Medical Concierge Group The Medical Concierge Group has pioneered telemedicine. Using artificial intelligence(AI), they have developed a Chatbot that enables their clients to get advice and referrals to live medical consultation. By using such innovations and integrations insurance companies can ensure that they improve on the overall customer experience and journey.
- Simplified claims processing: A pain point for most insurance clients is the claims process and the anxiety that comes along with lodging a claim and receiving the eventual payment. Claims Di, a company in Thailand, looked at this problem and built a solution that provides for seamless motor insurance claims lodging and settlement. Whenever there is a roadside accident, drivers using ClaimDi can simply shake their phone right next to the other party’s phone if they also use ClaimDi. The insurance companies of both sides will then handle the rest and the drivers can immediately leave without having to waste time waiting for surveyors. Solutions like these ensure that both the InsurTech, the insurer and the clients come out ahead.
- Ensuring improved turnaround time and a reduction in operational costs. An InsurTech who is able to improve efficiency while saving business costs is of immeasurable value and that is what Claimsync set out to do with their solution. This company, out of Ghana, provides an end-to-end claims processing platform that enables healthcare providers to prepare and send medical claims electronically. This will reduce the volume of paperwork; long processing time; delays in reimbursement; data entry errors and labor costs currently associated with paper medical claims.
There are numerous ways that technology and innovation can be applied to this still-growing sector. With such opportunities, the question that ecosystem players should be asking is if they are agile enough to adapt and if they are willing to take a risk on this sector and build workable solutions for it.
Written By: Evelyne Atim, Insurtech Lab Lead, [email protected]