The road ahead

Darryl Grater, Discovery Insure’s Executive Head of Distribution

Undoubtedly the last two years of the COVID-19 pandemic have left an indelible impact on the world. The short-term insurance industry has not been spared of this impact, and in our view, the three main changes for the industry on the back of the pandemic pertain to digitisation of insurance operations and the rising costs of insurance (due to inflation of vehicle parts and shipping costs).

Digital and tech-enabled insurers have adapted and are performing better than traditional insurers, given these shifting consumer patterns. Clients want ease and convenience when interacting with their insurer, including the ability to obtain a quote, add items to their plan submit a claim and interact in other respects, mainly if not all online.  In this regard, insurtechs and telematics-based insurance are now mainstream compared to when Discovery Insure launched as the only player in this space locally, in 2011. Given our commitment to world-first, cutting-edge innovation, this has included annual updates to our offering. These regular cycles of innovation and investment in R&D have ensured that we offer the most relevant benefits and rewards to our clients. Our extensive data set distinguishes us as global experts in incentivising behaviour change and facilitates a comprehensive understanding and appreciation of our clients’ needs.

Despite this move towards digitally-enabled insurance, one thing that has not changed during the pandemic and that is arguably more necessary now than ever, is the primacy of sound financial advice. Coupled with clients’ needs for seamless online interaction, a financial adviser or specialist broker plays a crucial role in ensuring that clients also have a personal touch, a voice they know on the other end of the line in their moment of need and are able to properly gauge their needs and level of understanding.  Clients are evolving to seemingly desire a hybrid solution that includes engaging their adviser digitally, along with in-person engagement if ever required, especially in the early days of a relationship when establishing trust and rapport is the goal at hand. It is essential that insurers play their part in supporting and enabling brokers to be properly capacitated to operate in this digital environment, and we are proud of the many initiatives that Discovery has implemented in this respect to support our salesforce, who are the front line in how our clients experience our product offering.

One of the ongoing effects of the pandemic is the unfortunate challenges faced in terms of the supply of vehicles, vehicle parts and paint globally, along with rising shipping costs. Vehicle repair costs have far outpaced inflation and are up to 9% higher resulting in an annualised increase of 18% per annum. The rate of vehicle depreciation year-on-year is also lower than historically experienced due to the growing demand for second-hand cars. In fact, some used vehicle models can now be sold for a higher price than when they were initially purchased! This is a global phenomenon and has affected vehicle traders and insurers around the world, by increasing claims costs.

Finally, it is crucial to note that it is ultimately still customer experience and customer satisfaction that sets one insurer apart from another, similarly to how the quality of advice and strength of the relationship differentiates brokers. We know that the decision about who to be insured by is influenced not just by price and rewards but by service levels to clients when they need us most, often at the point of claim. In this regard, we are proud of our Insure24 service, which provides 24/7/365 emergency care to our clients, including emergency roadside assistance and our safety features such as Impact Alert which enables us to support our clients quickly after an accident, inclusive of trauma management and medical assistance. Driver DNA (our world-first tech-innovation that analyses driving behaviour to pick up when a car is being driven by someone other than the primary driver on the policy) is essential for predicting theft and hijack scenarios where the criminals drive in a very different style to the regular driver. In addition, embedding trauma counselling for clients who have been victims of crime (irrespective of their product level) is an essential benefit and needed by our valued clients after experiencing a traumatic event.

While we’re conscious that ****how we work and cater to our clients operationally has changed for the better, the principles of insurance have not changed. It is precisely in times of rapid social change and uncertainty, similarly to how much of the world including South Africa is currently facing, that our industry can provide people with security and a safety-net. Insurance also protects the economy and economic output when you consider the macro impact insurance cover brings to business clients. As the most innovative insurer in the market, we are confident of our agility and ability to keep pace with changing consumer habits and needs, and we look forward to scaling our solutions hand-in-hand with our broker partners across personal and business insurance segments in South Africa, as well as further international markets.