Morné Stoltz, Head of Department: Broker Distribution: MiWay
With South Africa being a nation of small businesses, and insurance an essential service underpinning the resilience of those businesses, brokers must consider digital technology as an integral component of their value proposition.
The reasons are simple: efficiency, accuracy and improved delivery driven by modern technology not only results in a better service to every customer, technology also drives down the cost of providing insurance cover.The broader perspective is that individual customers have come to expect quality and convenience without an associated cost. Companies like Google, Facebook and Netflix have shown people everywhere that with sufficiently advanced technology, an amazing level of personalisation is possible at little extra cost. In Google and Facebook’s case, no cost at all to the user.
The principles of digitalisation, while relying to an extent on scale especially where nominally free services are concerned, are broader. What brokers need to understand is that while complex and challenging, digital technology is at the same time eminently accessible. Cloud computing, software (and more) as a service and better connectivity has made available remarkably capable technology at previously unheard-of prices. Essentially, this reality means failure to digitise is more about will than it is about cost. But the cost is an excellent place to start because while it will require a concerted effort, digital technologies often deliver outsized value for the money invested. Take administration and compliance as a case in point; no broker relishes this aspect of the job, yet it is entirely necessary. Maturing technology like robotic process automation (RPA), which incorporates machine learning and artificial intelligence, can automate administrative and compliance tasks.
The cloud doesn’t just deliver smart technology either, as cloud organisations demonstrate. You can also access ‘pay-as-you-consume’ services which reduce other administrative expenses: personal assistance, bookkeeping, invoicing, and other services are readily available. These examples show immediate and easily accessible benefits which are likely to get you thinking. Going into a full-blown digital transformation could include updating back office accounting systems and putting those into the cloud or creating a customer-facing app and website which provides self-service functionality, accelerating both sales and claims. Once again in the cloud, you could even set up a virtual contact centre supporting your customers and offering the kind of service associated with a big corporate.
By saving time and money, your ‘cost to serve’ goes down. Profitability can go up, either by serving the same customers more efficiently and earning a better margin, or (perhaps ideally, given the pressure under which most South African SMEs are labouring) by reducing your prices and attracting more business. The application of digital technology – again, using the scale versions of Facebook and Google – also delivers an incredibly powerful competitive advantage: customer experience. Customer experience is recognised as a game changer, because for too long in too many industries customers have come to feel like nothing more than a number.
Digital technology changes that, and it goes far beyond never forgetting a customer’s birthday – how about automated reviews of their portfolio, reminders for regular contact through instant and targeted communications, and much more. With the cloud, the sky really is the limit.
A final thought for brokers everywhere is that you cannot rest on your laurels. Digital technology today is astoundingly accessible and affordable. It doesn’t cost much to test, try, experiment and then implement. If you aren’t looking at how your brokerage can take advantage, be assured that your competitor most certainly is. And with SME customers looking for the best deal combined with personal attention, you know what that means.