The COVID-19 pandemic has reinforced the need for companies to adopt technology to make life insurance purchase and uptake simpler as more consumers embrace a tech-based shift.
In line with this shift, CIC Life Assurance MD Mr. Meshack Miyogo said that the insurance industry is critical for effective risk mitigation and it is therefore vital that the industry evolves with the times.
“To stay relevant, insurance companies need to accelerate their digital transformation journeys by looking at the whole life-product purchasing process. Developed economies are already using emerging technology with insurance firms utilizing tech to support real time underwriting and claims pricing. As such, insurance companies in emerging markets need to start investing in and building capacity for this,” said Mr. Miyogo.
With the uncertainty around COVID-19, the insurance industry is expected to grow as more people embrace life protection against unforeseen circumstances. Additionally, the constant growth of the middle class has increased demand for policies that shield against risks and support wealth management.
Mr. Miyogo added that there is need for adoption of innovative tools utilizing emerging technologies. “The use of AI and Big data is increasingly becoming a major factor for growth in the insurance industry. Use of data enables insurance providers to create customized products and solutions that are practical and relevant for the consumer. Consumers are now demanding for personalized experiences and the adoption of technology is a catalyst for meeting their demands,” he said.
As consumer behavior shifts towards online channels, developing digital insurance platforms that onboard and allow users to manage policies online will be a key consideration for consumers going forward. This can be done through partnerships with InsurTechs or by building digital capabilities within the organization.
Furthermore, strong digital systems will reduce operational costs for insurance firms, reducing the amount of paperwork, physical offices and human capital resource spent on face-to-face interactions.
The Association of Kenya Insurers 2019 annual report highlighted that insurance penetration was at 2.37% with an average growth rate of 8.27% since 2015. The report also showed that non-life insurance penetration was at 1.37% while that of life insurance was at 1%.
However, insurance is now gradually becoming a vital tool for wealth management for middle and high net worth individuals. This has given insurance firms an opportunity to utilize digital platforms to educate consumers about life insurance as a form of financial planning.