A buzzword we’ll be seeing more of in 2018 is insurtech or, to remove the jargon slightly, insurance technology.
This is one of the hottest trends in South Africa according to head of AlphaCode Dominique Collett.
“Insurtech has gained momentum over the last two years in South Africa. It was initially seen as a major threat by insurance companies, but now insurers are taking a far more proactive approach to seize opportunities in this space and are starting to collaborate with startups,” says Collett.
Truth be told we’ve seen this once already this year in the form of Naked Insurance. This newly launched firm handles vehicle insurance via an app. Applications, claims and maintenance on the policy can all be done from a mobile phone with only edge cases requiring a human to step in.
Collett says that the reason insurtech will continue to grow is because millenials are now entering the insurance market and have different expectations compared to older generations.
For this reason more insurers are looking at ways to disrupt the market by leveraging disruptive practices and technology.
“The winners will be the ones who are able to crack distribution,” says Collett speaking about how insurance companies will succeed in South Africa as insurtech becomes more prominent.
“The key challenge in the South African market is the small number of economically active people; a much smaller pool than in the US and the UK. How we make these products accessible to this key audience will be insurtech’s biggest challenge,” she adds.
Trendy SA insurtech
As insurtech continues to grow locally, Collett has noted four trends that are shaping the space right now.
The first is the digitisation of product distribution and finding new ways to bring products to the customer. For instance, Click2Sure offers insurance at point of sale so customers are able to insure a product they purchase from a retailer at point of sale.
The second trend is the disruption of insurance products themselves. One company disrupting insurance products is Cascade, which allows customers to save money for insurance purposes. Should a customer need to file a claim below a certain amount it will come out of their savings meaning they need only insure themselves for larger more costly instances.
Collett adds that a combination of how products are distributed and how insurers innovate is also starting to gain momentum locally.
There is also room in the insurtech for those looking to help insurers enter the 21st century. FinChatBot is building chatbots for insurers such as Youi, a subsidiary of OUTsurance.
AlphaCode says that the insurance sector is changing rapidly and will not remain static pointing out that OUTsurance is making waves in the sector with its app that is easy to use and offers customers a simple way to file claims and more.
Insurtech appears to be a rather exciting space in 2018 and we look forward to seeing a great many more innovations in the space.
[Image – CC 0 Pixabay]