They say time changes things, but you actually have to change them yourself or else your old ways will not open new doors.
The insurance industry is at that point where change must be intentionally made failure to which we risk letting our future be dictated by a revolutionary business.
The industry is facing changes from different fronts and they each require different, but implementable, interventions.
For starters, the proliferation of technology and its ubiquity in our everyday life, means that if technology is not ingrained in our processes and products, we are likely to be wiped out from the business landscape.
Technology is critical in increasing internal efficiencies and improving customer service.
Insurance, not only in Kenya but world over, has been slow in adopting technology.
Many internal business processes have adopted technology, but very few customer-interface processes and access points have adopted technology.
The latter element is one of the ripest areas for technological disruption and we are already witnessing it with the rise of insuretechs and online aggregators.
The insurance buying process differs for various products— there are those that are easy to sell and also process claims online such as home insurance.
However, there are some products, such as medical insurance, that must have human interaction.
Kenyan underwriters take cognisance of this and are working towards integrating technology in the sales and distribution of insurance products.
Another change that the insurance industry must contend with is the changing consumer.
Kenya’s median age is 19 years, 50 per cent of the Kenyan population is aged between 0 and 19 years, while 25 per cent is aged between 20 and 34 years.
The 20 to 34 year olds are climbing the income ladder and possess long-term purchasing power, they also happen to be the most underinsured.
These consumers are tech savvy, well-educated and have a variety of options for insurance products, both formal and informal.
Their tastes and preferences for insurance products also differ from what has been the norm.
For them, understanding the product and the benefits it offers is paramount.
They prefer to enjoy the benefits within a shorter period, five years and below, and they are also keen on investing as opposed to only protecting themselves from risk.
Insurance companies are focusing on this consumer who will form the bulk of policy holders in the short term.
Bearing the customers’ requirements in mind, insurance companies are focused on customising products and determining the best communication and distribution channels.
Increased supervision of the financial sector is another change that is sweeping across the insurance industry both locally and globally.
The Insurance Regulatory Authority introduced the Risk Based Supervision model in 2013.
This is a positive move, and an ongoing process, as it ensures insurance companies can meet their liabilities and especially so to its customers or policy holders, an element that has been the thorn in the flesh for the industry.
The implementation process is ongoing up to June 2020 when all companies are expected to have complied.
However, before the implementation, a lot of analysis must be done to ensure that it does not unfairly hurt insurance business.