How technology is shifting perceptions about life insurance

[ad_1]

Columnists

 

Life insurance in Kenya has traditionally been characterized by low uptake. This is attributable to the common perception that purchasing a life insurance policy is akin to contemplating one’s demise. In most African communities, it is taboo to think of, let alone plan for one’s death.

Yet life insurance is essentially meant to offer financial protection to a person’s dependents should untimely death or permanent disability occur. It also acts as a long term investment tool helping finance children’s education, build a home and provide income during retirement. Viewed from a broad perspective, life insurance transcends death, and should ideally be an avenue to the future financial well-being of one’s family.

Like the rest of the insurance industry, life insurers were slow to embrace technology. This is however changing as the digital economy takes root. Technology has come in handy in serving especially the large, under-served middle and lower income markets. Mobile and online platforms are gradually redefining how insurers engage with consumers.

A report on global insurance trends by consulting firm Deloitte titled Unlocking the Potential says that insurers are increasingly integrating technology into their operations. The pervasive influence of digital capabilities in the insurance market has created a new force in the form of innovation fueled by these transformative technologies.

Insurance has traditionally been a paper-based business. Almost every process depends on paperwork, from the time the customer is brought on board, to the point where the contract ends or the claim is paid. Paperwork increases bureaucracy and costs and is environmentally unfriendly. In the digital era where things happen in real time, this business model is unsustainable.

Notably, there is thriving competition from mobile money and other non-insurance financial services. Consumers are getting more accustomed to solutions at their fingertips and the convenience that comes with mobile banking and e-commerce. The fast-evolving consumer preferences and behaviour are a moving target insurers have to constantly strive to satisfy.

It is therefore inevitable that insurers will have to do away with the status quo and deploy technology across their business spectrum. This also entails simplifying products to enhance convenience and accessibility to insurance products.

The increasingly youthful and tech-savvy consumer demands attention and solutions on the go. They no longer have to visit the insurance company’s offices to have their issues addressed.

Moreover, in the new era of Big Data, the vast amounts of information related to client behavior and preferences are helping life insurers better understand their customers. Digitization of life insurance calls for improved data analytics and consumer profiling, for example, mapping life expectancy, medical history and lifestyle.

The use of such data obviously raises ethical and legal questions regarding client privacy. But with the appropriate safeguards, such data can be protected and used only for the right purpose, namely to enrich the customer experience.

[ad_2]

By Kenyan Digest

The Kenyan Digest Team