Other parts of this series:
Greater use of digital would enable short-term insurers to push up gross written premiums by R115.2 billion by 2020.
Digital offers South African short-term insurers a huge opportunity to dramatically increase revenues.
Local short-term insurance providers have been slow to deploy digital technology. Our research, however, shows that customers are eager for digital products and services. To capitalize on this opportunity, insurers must substantially improve how they engage with their customers.
We calculate that greater use of digital technology would enable short-term insurers in South Africa to push up their gross written premiums by a staggering R115.2 billion by 2020. If they continue using their current systems and processes their GWP would probably climb around R44.1 billion. That’s a R77.1 billion digital pay-.
Our recent survey of 1 500 retail insurance customers across the country shows that many consumers are keen to enter into close, digitally-enabled relationships with their insurers.
More than half the customers we surveyed, as illustrated below, want their insurers to respond instantly to their immediate needs and provide holistic solutions. Close to half would like their insurers to offer loyalty programmes and engage with them using social media.
Opting for a digital insurer is not a big step for many of these people. Most of them are already using digital technology to access other services. Nearly all of them browse the internet at least once a week, 86 percent from mobile devices, while 66 percent use online banking services and 20 percent make, or receive, online payments. As many as 80 percent of the consumers we canvassed say they would buy insurance products online.
The digital opportunity for short-term insurers is enormous, but so is the risk for companies that don’t make the move.
In my next blog, I’ll discuss some of the challenges insurers need to address to capitalize on this opportunity.
To learn more, download the full report:
Be Digital: A R115.2 Billion Opportunity for South Africa’s Short-Term Insurance Industry