Hyper-automation is a valuable ally in the war for talent retention and in helping both employees and organisations navigate the complex working landscape post-pandemic. FILE PHOTO | POOL
With the 4th industrial revolution, digitalisation has had a huge transformative effect on many sectors worldwide.
The impact of the same has been huge on financial services in Africa as well, with advances in fintech rapidly increasing financial inclusion through the adoption of mobile money and mobile lending and savings.
This impact has, however, not been fully felt in the insurance and pension spaces, where processes have not been refreshed and the technology supporting the processes remains archaic.
Historically, insurance and pensions in Africa have experienced growth largely as a result of compulsion through government and regulations.
The penetration levels remain low outside these mandated products. This has also led to a perception that insurance and pension products are products to be sold and not bought, as their perceived demand is lower than that of credit and savings products.
As the populations in Africa become younger and increasingly financially and digitally literate, the demand for insurance services is increasing.
This population has also experienced the seamless service offered by banks through online and mobile channels and expects the same from other financial institutions.
End-to-end digital service, including self-service, capabilities are therefore an absolute minimum for this new consumer.
In addition, considering the working population is largely within the informal sector, insurance and pensions products designed for this market need to be simple and flexible.
The supporting technologies, therefore, need to allow for features such as shorter-term covers, bite-sized premiums, irregular premiums or contribution payments and seamless prompt benefits and claims payments.
The digitalisation of insurance and pension processes also offers immense benefits due to the data generated.
Vast amounts of data generated will allow for more data-driven decision making which will improve sales through cross-selling and up-selling, increased customer retention and improved customer satisfaction.
Using data, insurance and pensions providers can tailor products to the needs of the customers based on their behaviours, preferences and risks.
Insights from the data will also help in designing risk mitigation and fraud detection controls which will improve the overall financial outcomes.
Digitalisation has resulted in immense productivity and efficiency benefits in other industries, which will also apply to insurance and pensions as processes are automated.
Traditional manual processes are time-consuming, prone to errors, and require extensive paperwork.
With the introduction of digital systems, administrative tasks such as customer onboarding, claims processing, and policy management become streamlined, enabling faster and more accurate service delivery.
These advancements reduce costs for both service providers and customers, making pensions and insurance services more affordable and accessible.
Entrenching the use of robotics and artificial intelligence (AI) alongside the systems also has the potential to lead to improved efficiency, accuracy and customer satisfaction measures.
One key area is the claims processing and underwriting procedures.
AI algorithms can analyse vast amounts of data, including policy information, customer profiles, medical records, and historical claims data, to assess risks and make accurate underwriting decisions.
This automation reduces the time-consuming manual efforts previously required, leading to quicker turnaround times for policy insurance and claims settlement.
On May 29 this year, Lemonade (an AI-enabled insurtech) paid the fastest claims in history, where their AI claims bot “Jim” paid a theft claim two seconds after it was reported.
Chatbots and virtual assistants powered by AI are being employed to handle customer inquiries, provide instant quotes, and assist in policy management.
These intelligent systems can understand natural language and provide personalised responses, improving customer engagement and satisfaction.
They can handle routine tasks, such as policy renewals and updates, freeing up customer service staff to focus on more complex customer interactions.
