At a recent regional Insurance technology (Insuretech) forum Co-hosted by CIO East Africa and Zep-Re at the Nairobi Serena Hotel, it emerged that the current business model for insurance companies is broken and needs an urgent re-thinking.
Insurance companies were challenged to re-imagine their businesses operations in order to grow its penetration rate that has steadily been growing downwards, indicating huge losses to what the insuretech delegates jokingly termed as the 'business of making losses'.
During a panel discussion moderated by Bobby Yawe, CEO Synaptech Solutions on the Readiness for Digital Revolution by Insurers in the East African region, Nikhil Kapoor the CTO at InfoAxon Technologies and a panelist noted that stakeholders believe that the status quo of insurance today is as a result of un-innovative products that were created more than 50 years ago and that it was about time insurance was disrupted by technology.
He said; "If technology be integrated into insurance products, every aspect of insurance will grow. ICT is critical to insurance because technology has disrupted every single industry."
Also speaking at the panel was Elias Omondi, the Actuarial Associate at the Insurance Regulatory Authority who pointed out that Insurance companies seem settled on achieving good top-line revenue and rarely measure profitability. This has led to massive loses and unhealthy competition within the sector.
"There is some automation projects happening within the sector but most of it is focused on automating the old inefficient, un-innovative processes," he averred.
Alexio Manyode, CIO ZEPRE, gave out pointers that would help disrupt operations in what is apparently a sleeping giant in the finance industry.
He noted that if insurance companies would create and fund internal innovation spin-offs and facilitate for partnerships and collaborations with tech startups to accelerate innovation, the uptake of technology would rise in what he said was a starting point for re-modelling insurance products to suit the current client.
Other strong points included revising annual premium payments and re-structuring premium payments even to PayG products as are demanded by the millennial generation that do not harbor any interest in long term property policies.
The Group Chief Operations Officer at Britam, Jack Maina mentioned AI, Big Data and Blockchain as some of the technologies that Insurance companies should seek to to draw solutions from going forward into their digitization phase.
we who moderated the session concluded by challenging the insurers to either disrupt their operations or watch the space being disrupted by insurance start-ups who will eventually 'kill' the current conserved industry players.