April 13, 2021

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Covid-19 forced insurance industry to adapt to digital trends

Dec 24, 2020

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By Ronald Tembo

Since the March lockdown was implemented to tackle the spread of Covid19, the insurance industry has had to adapt to ensuing digital trends.

The pandemic forced businesses to increasingly rely on digital technology to enable workers to work remotely. For the insurance industry, it entailed online claim processing, online claim assessments and new client acquisition via digital platforms.

During the hard lockdown, many workers could only perform their tasks remotely. The move by the government was aimed at keeping workers safe from the virus.

In line with the Insurance Institute of South Africa’s (IISA) mission to transform the insurance profession by continuously upgrading skills development, it encourages the industry to embrace digital technology while being mindful of the challenges involved.

The latest Health Ministry public notices show the virus has infected more than 730 000 people in South Africa and killed more than 19 800.

Many businesses have closed, and more than 2 million workers lost their jobs. Statistics SA figures released earlier this month show the country’s unemployment rate jumped from 23.3% to 30.8% in the third quarter.

In May, Arthur Goldstuck, the founder of World Wide Worx and editor-in-chief of Gadget.co.za, wrote that the Covid-19 crisis highlighted the accuracy of forecasts of growth in e-commerce, remote working, and learning, and medical services. He correctly said the insurance sector provided examples of great foresight resulting in exactly the right kind of service for many consumers.

Goldstuck cited a South African insurance start-up called Naked, which provides quick cover and claims via an app, and has for some time offered a “CoverPause” feature.

This allows customers who do not plan to use their cars for a period to pause the accident element of their cover and downgrade it to stationary cover. Even though this cover was not designed for lockdowns, it turned out to be perfect for the new environment.

The Covid-19 pandemic has hastened the use of digital networks and practical use of the Fourth Industrial Revolution (4IR). This requires the insurance industry to upskill workers.

The IISA has provided constant guidance on how the industry can adapt to the new environment.

During the pandemic, digital technology also transformed the health insurance industry. Most unexpected for life companies was that the regulator intervened to stop medical tests in the underwriting process to free up laboratories for Covid-19testing.

Many companies failed to adapt. Some traditional players were using paper applications in their broker models. But they soon found out they could no longer reach the customer.

These new business models, innovative insurance technology, and high customer expectations are forcing the insurance industry into massive transformation in the way business is done.

IISA thus has a primary responsibility to its members and the industry to promote the advancement of knowledge and skills, maintaining standards and ethics of the highest level as well as professional development.

The Covid-19 pandemic has taught the insurance industry lessons about how the Fourth Industrial Revolution (4IR) can help to solve problems.

Ronald Tembo is the executive manager at the Insurance Institute of South Africa.

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