Abdur-Rehman Mangera, Head of Group Benefits, Bryte Life
In today’s fast-paced, ever-changing world, customers turn to the insurance industry for more than protection against known risks. They rely on us to be forward-thinking and to continuously evolve to help them prepare for future uncertainties. For the industry, staying ahead requires ongoing customer engagement and a consistent commitment to progress and innovation.
The COVID-19 pandemic served as an unexpected yet powerful lesson. It emphasised the need for crisis preparation and forced a rethink of long-held assumptions. On a more granular level, the pandemic taught us the importance of protecting against a broad range of potential risks, including those that are difficult to predict, such as disease or disability. These lessons, while learned during a time of crisis, remain extremely relevant in a post-pandemic world. However, a key takeaway for our industry has been somewhat overlooked: stay connected to your customers, understand their evolving needs, and continue to innovate to meet them.
Awareness and education
One of the most debated questions regarding protecting workers, their families, and communities is who raises awareness about the risks to lives, lifestyles, and livelihoods. There is no single answer. Many say that people must take responsibility for themselves, while some point to the government. Others say it is the employers’ job, and the insurance industry has an important role. The truth is that all parties have a vested interest in keeping the public educated and informed.
As it stands today, a lack of consumer awareness leaves many South Africans vulnerable to financial devastation when faced with serious illness, disability, or other life-altering events. While many South Africans have come to appreciate the value of life cover, critical illness and disability insurance remain under-utilised and, in many cases, misunderstood.
The pandemic shone a light on the devastating financial and emotional strain that critical illnesses and disabilities place on individuals and their families. It is, however, concerning that the lessons of the past five years have not influenced a notable change in consumer behaviour.
Many consumers continue to assume that life cover is enough to protect them and their families in unexpected health crises. The reality, which usually dawns too late, is that a severe illness or disability can strip a family of their income and quickly deplete any savings. This often leads to a lifestyle downgrade and worse as most South Africans have insufficient savings to cover the cost of unexpected events, and government assistance is woefully inadequate.
The industry bears much of the responsibility for this lack of understanding. There hasn’t been enough investment in consumer engagement and education. Insurance products, especially those offering protection against disability or critical illness, are poorly understood, leaving consumers at significant risk.
The Moment to Act
A lack of meaningful innovation is another major problem plagues the insurance industry. Despite advances in medical science and ongoing societal and global economic changes, life and risk products have remained relatively static. While there have been some changes, many are merely minor adjustments to existing products rather than innovative solutions to address new and emerging risks.
Periods of great change demand bold responses, and the insurance industry is no exception. Many insurers seem to be too comfortable with the status quo. But they miss a crucial point: the world is changing rapidly, and so are consumers’ needs.
Today’s consumers are better informed and more demanding than ever before. They want services tailored to their unique circumstances that continue evolving with their lifestyle. With too many one-size-fits-all solutions, the insurance industry does itself a big disservice by failing to keep up with these expectations. Other economic sectors – from hospitality and retail to finance and transportation – have undergone massive disruptions driven by consumer demand and technological advancements.
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Group risk products
One area that demands innovation is group risk products, especially in the short-term insurance space. Employers and organisations face new, real-world challenges requiring a fresh risk coverage approach.
Reluctance to embrace innovation has left many businesses and their employees underserved. For example, the rise of remote work, jobs in the gig economy and changing family dynamics present unique challenges that traditional group risk products cannot address.
This is a disservice to consumers and a significant missed opportunity for the industry. There is vast potential for dynamic expansion and growth, but insurers will lose this opportunity unless they step outside their comfort zones and rethink their approach.
The world has changed, and the risks our customers face have evolved. The products we offer must evolve with them. A proactive approach to change would ensure our customers feel supported and empowered rather than left behind in a rapidly changing world.
The insurance industry can continue to hold on to outdated models and risk being overtaken by change, or we can embrace innovation, engage actively with our customers, and evolve to meet their needs. By taking a proactive approach, insurers can better serve their customers, keep abreast of emerging risks, and secure long-term sustainability.