Insurance evolved in the digital age

Insurance evolved in the digital age

Technology is disrupting many businesses across the globe and the insurance industry has not remained untouched. In fact, the insurance industry is faced with even greater challenges as they not only have to worry about ho technology is affecting their operations, but also that of the clients they are insuring.

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Technology is disrupting many businesses across the globe and the insurance industry has not remained untouched.In fact, the insurance industry is faced with even greater challenges as they not only have to worry about how technology is affecting their operations, but also that of the clients they are insuring.

Influencing behaviour – The Internet of Things and the strategic leveraging of technology

Insurance companies that are actively leveraging technology as a strategic enabler, are moving away from the traditional insurance product design and risk-based approach to a more individual customer centric approach.

Discovery is a good example of this. By exploiting the opportunities technology continues to provide, they have dramatically penetrated the medical insurance, life insurance as well as short-term insurance market. Much like the successful FNB and OUTsurance, their success lies in their ability to leverage technology to influence behaviour. These organisations are all part of the RandMerchant Empire that were led by a trio of pioneers namely Paul Harris, GT Ferreira and Laurie Dippenaar.

These organisations all share the same strategic thinking when it comes to business. They are of the opinion that “opportunities lie in using technology in creating different business models”. For them, it is not about using technology to support the business but to use technology to exploit market opportunities. One only has to look at successful innovations such as Discovery’s vitality programme and FNB’s Ebucks rewards programme to understand the benefits of influencing behaviour.

Discovery’s medical aid and life insurance actively encourages healthy living to reduce the need for medical calls and claims. In addition, their rewards are targeting the younger more healthy part of the population to ensure an equal distribution of age categories where other medical aids are struggling to retain and attract younger members.

Discovery Insure also tracks driver behaviour to encourage its clients to behave and drive responsibly through cashback rewards.

These innovations are made possible by wearable activity trackers and other inexpensive monitoring devices that monitor health, driving habits and geo locations on an individual level to gather personal data over time. These devices are collectively referred to as the Internet of Things (IoT). The data is analysed to create generic profiles and to understand the levers that need to be pulled to influence client-behaviour to fit the needs of the business.

The key is to create a mutual beneficial relationship that is, or appear,as a “win-win” situation.

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© 2017 KPMG Services (Pty) Limited, a South Africa private company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

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