South African insurance companies are increasingly using technological advances and better digital platforms to personalise their client experiences, according to Discovery Insure CEO Robert Attwell.

 

‘This drive has been seen in various insurance mobile app enhancements and the ability for clients to interact and change their insurance policies,’ Attwell told Citywire South Africa. ‘A fair number of insurers are likely looking to incorporate artificial intelligence [AI] into their business processes.’

Given the pace of change in the insurance sector, advisers should keep up to date with the latest innovative offerings by both traditional and startup insurers to ensure their clients have the best risk management possible.

How the insurance sector uses AI

Insurance technology – known as ‘insurtech’ – is the use of innovative technologies to optimise, modernise and automate insurance.

According to insurance disruptor firm Pineapple (FSP 48650), these solutions have disrupted the traditional insurance sector by introducing new products, services and business models to clients. Their accessibility and efficiency have allowed previously underserved communities to access insurance for their products.

Insurtech allows for more customised and affordable policies, more accurate risk assessment, faster quote creation and claims processing, and potentially lower premiums for some policyholders, said Pineapple, which is underwritten by Old Mutual Alternative Risk Transfer Insure.

Insurtech specifically uses the following, according to Pineapple:

  • AI to better assess client risk, detect fraud and automate routine tasks;
  • the internet of things, which allows the collective network of connected devices (eg, smartwatches) to work together to generate real-time data to monitor risk and offer tailor-made insurance products;
  • blockchain technology to improve trust between insurance providers and clients, reduce transaction expenses and improve data security standards;
  • data analytics, which allows insurtechs to use data to gain insights into customer behaviour, spot trends, assess pricing and refine risk assessment; and
  • telematics (in the context of motor insurance, for example), which considers a driver’s use of their car (eg, average distance driven and driving behaviour) to determine a fair premium based on the driver’s risk profile, as opposed to using rigid factors like age, location and insurance history.

Insurers are also using data-driven solutions to manage climate risks. At the same time, ‘vast data sets’ and AI-driven insights allow car and home insurers to better understand the likelihood of extreme weather events and create responsive and resilient underwriting policies, according to a press release citing Funeka Ngewu, executive head of claims and procurement at Momentum Insure.