Jerry Anthonyrajah, Chief Commercial Officer and Interim CIO at Old Mutual Insure
The insurance industry is undergoing significant transformations, presenting both challenges and opportunities for industry players.
From product innovation to addressing new risks, insurers and brokers alike must adapt to the rapidly shifting environment to deliver value and stay competitive. Below, we explore key growth areas and strategies that highlight opportunities for the industry as a whole, with a special focus on brokers.
Health insurance represents a significant growth area for industry. The rising cost of medical aid in South Africa, with double-digit increases projected for the upcoming year, is prompting individuals to seek alternatives. This trend creates a demand for innovative and affordable health insurance solutions.
For the industry, identifying optimal distribution channels and leveraging digital platforms will be essential to meeting customer expectations and improving accessibility. Collaboration between insurers and brokers can drive the development of comprehensive health insurance offerings tailored to diverse customer segments.
Cyber insurance opportunities – The growing prevalence of cyber threats highlights the need for the industry to address cybersecurity risks more comprehensively. For insurers, this means developing products and services to help SMEs and Corporates improve their cybersecurity and overlay it with affordable coverage in the event of an incident.
Regulators are also stepping up their oversight. The Prudential Authority (PA) in South Africa is set to introduce cybersecurity joint standards by mid-2025. This development will require insurers to enhance their own security measures while also helping binder holders and brokers secure their environments. As an industry, addressing cybersecurity challenges will involve significant investments in technology and expertise to ensure compliance and protect policyholder information.
Embracing Generative AI – Generative AI presents opportunities and challenges for the insurance industry. On the one hand, it offers potential for innovation in areas such as claims processing, customer engagement, and product development. On the other hand, it raises new cybersecurity concerns and ethical considerations.
For insurers, integrating AI responsibly will be key to unlocking its benefits while mitigating risks. The industry as a whole must focus on establishing frameworks that support the safe and effective use of AI technologies.
Upskilling and Innovation – To remain competitive, the insurance industry must prioritise upskilling and innovation. For brokers, this involves:
- Market Focus: Clearly defining target markets, whether individual clients, high-net-worth individuals, SMEs, or corporates, and tailor go to market strategies to meet each segment’s specific needs.
- Specialised Expertise: Investing in the capabilities required to offer niche products, such as cyber and liability, risk mitigation services, and building partnerships to accelerate growth in these areas.
- Customer Experience: Leveraging digital channels, Advanced analytics, AI and Gen AI to ensure seamless omni-channel interactions with their customers. Insurers and brokers alike must prioritise user-centric approaches that meet the evolving expectations of modern customers.
Industry Outlook – The insurance industry is experiencing rapid change. The rise of health insurance alternatives, the critical importance of cybersecurity, and the integration of AI are reshaping the landscape.
For insurers, the focus must be on creating innovative products, improving operational efficiencies, and addressing regulatory requirements. Brokers, as intermediaries, have a critical role to play in connecting customers with these solutions and providing informed advice. Collaboration across the industry will be essential to navigating these changes and driving growth.
As we move into 2025, the need for understanding how to make these trends practical and applicable for our business has never been greater. By embracing innovation and focusing on customer needs, the insurance industry can turn today’s challenges into opportunities, paving the way for sustainable growth and resilience in an ever-evolving market.