Survey results imply that someone has eyes on your customers
Greg Becker, Independent Actuarial Consultant
The COVER Advisory Insurance Survey 2020, in partnership with the OESAI, was conducted in October 2020. The results were presented at the OESAI virtual conference. Responses came from all over Africa, from life and non-life, and the respondents covered all functional areas: marketing, underwriting, claims – although many defined themselves as managers reflecting the senior status of the respondents.
Collectively this snapshot offers insight into the African insurance market, its current challenges, future prospects, and the strategic options that industry participants are either implementing or considering
The respondents collectively predict low single-digit growth rates, which implies that meaningful growth will most likely come at their competitor’s expense. This is in-line with the view that most players will focus on cannibalizing their competitor’s customers, although many felt that the market could grow and that new customers could be reached through mobile channels or through simple entry-level micro-insurance products.
The respondents reported many of the same challenges as in previous surveys suggesting that more progress needs to be made. Most saw that back-office administration was their employer’s biggest challenge, which correlates well with the marked increase in the focus on the automation of back-office administration processes and focusing on direct distribution channels: expect to see more paperless underwriting, paperless workflow and chatbots.
COVID-19 is probably contributing to this response, but so is the 4th Industrial Revolution coupled with the ever rising comfort levels customers have regarding self-service, digital and telephonic sales channels – especially when products and processes are designed to be sold this way, reflect by almost a third of respondents saying that simplifying the sales process was their principle area of focus this year.
When asked about marketing strategies and unlocking customer segments in innovative ways, many were implementing – or interested in implementing – strategies designed to cross-sell or upsell products between different silos: group life, individual life and non-life customers. This can be seen as being nothing more than monetizing existing client data and relationships or finding partners who have customers with untapped potential and getting their first, for example, going after banks with bancassurance products.
Much more was covered: paying claims is still seen as being the best area on which to compete, followed by price and then product range and product features. Respondents felt that the regulators need to play their part and help grow the market and that reinsurers can provide lots, especially capacity and knowledge.
Keeping up with the future was seen as being the industry’s biggest challenge. Some market players/competitors are going to be ready for the future – the question is are you going to be one of the companies that is growing and cannibalizing your competitors, or are you going to be one of the companies being cannibalized?