Clinton Da Costa Brown, Solutions Sales Lead, SSP Africa
What we are seeing now is the emergence of the platform era. Rather than being simply a value, technology now sits at the very heart of a business model.Clinton Da Costa Brown
This has only been heightened in 2020. As they say, in every crisis there is opportunity. COVID-19 will probably lead the insurance industry to change significantly in mainly three areas:
- Acceleration of business innovation
- A faster shift from physical to digital channels – specifically, to products aligned with those channels
- End to end automisation and optimisation of processes.
Prior to COVID, the rate of change was already significant. Now, in just over a year, SSP has seen over 50% more clients expecting to do renewals online and a 500% increase in claims submission. We have seen COVID as a catalyst for customers to experience transformation. Projects for enhanced customer experience and product innovation have become mission critical. Yet a significant amount of companies simply do not have the tools and capability. We are therefore very busy with requests from all over the continent for customer portal access. Customers expect full functionality across insurance capabilities online.
Over the long term, we will see insurers moving away from simply being isolated policy providers to service providers operating in a wider eco system. Customers are used to a smooth online experience. They want financial solutions woven into their daily lives, not simple standalone products. Think AirBnB, think Amazon. They no longer benchmark the experience against competitor insurers but against these.
What we are now seeing is the maturity of those insurtech business models. If I look at those shifts, which I like to call “forever shifts”, these will take place in four main areas:
- Customer centric focus where customers no longer see insurance in isolation of other insurance. They need insurance to be woven into their daily lives.
- A huge spotlight on product innovation particularly driven by new demands from customers and for system flexibility.
- Online first approach embodied in a self-service environment.
- Legacy modernization. Technology need to support remote workforces, which I believe is the final nail in the legacy coffin.
An example is that customers are not just looking for insurance cover, but a solution, for example to their cyber liability challenges. A particular solution I came across combines a variety of related services put together by AON, Allianz, Cisco and Apple. These include a cyber resilience evaluation, enhanced cyber insurance, ransomware and defense, incidence response and built-in strong security by Apple. This is a significant change in product development which create an environment where insurance is only a portion of the solution. It grows the “insurance as a service” model.
That’s critically important. If you have a partner and you have a platform that works together in a single ecosystem, the strength of the combination provides that greater customer experience.
Now we’re talking about combining different organisations, but they are all sitting on different platforms. How do we get this right? That’s where the rubber hits the road. Of the connected products and services insurance is only one, and it definitely needs a single solution. And obviously, that single platform needs to be owned by one provider in this ecosystem. It definitely makes sense that the insurer would provide the platform. And, therefore, they would need the capability to integrate other services into their platform to deliver that seamless solution to the joint partner.
So, as a platform, you as an insurer embrace the applications and the products and services of other people. And you are recognised together, in a single platform for the benefit of all, as opposed to just a policy administration system.
Most insurers don’t think this way. Most insurers, certainly in Africa, do not have platforms – they have policy administration systems.They take, for example, a legacy policy administration system, and wrap it in a wrapper within their own system with a few front ends, digitise it and that legacy policy system can even bolt on some processes. But that’s not a platform.
A platform is creating a local ecosystem of software – the insurance together with software that other people provide, or add to that insurance system the services of other people to support your customers. A collection, in which all legacy systems are redundant.
To get this, you have to go through a whole transformation process. As opposed to today, where what you simply do is you swap your administration system out for a new version, and you don’t need to replace the entire system.
Now, as soon as you start integrating the variety of different technology, unfortunately, some of those integrations break, you need to upgrade it – a costly process. The real benefits of a platform perspective is that they’re free up your internal technology teams. So, the third-party technology vendor, we as SSP are one of them for example, will take care of an organisation’s cloud infrastructure, and all the integrations delivered through the API’s. Now, you’re free to work on getting new customers and start client-facing applications and functionality. You could get involved in a machine learning Internet of Things, big data, use chatbots used for prevention and enhance your underwriting capability…. All of that increases the access across the whole value chain to allow you to price more effectively.
To take us as an example, what SSP has done in the last 30 years is evolve our focus to help our customers achieve innovation and growth, using our technology in different ways. We’ve been building out a platform, we’ve invested in excess of R816 million in what we see as a radical transformation of our software service operations. And that includes the development of the insurance platform.
There are many platforms out there, and our platform is very specific. We only support short term or general insurance customers. So, it’s an SSP platform, which is fully compliant and contains all the digital capabilities that an insurance company would need. It’s a collection of SSP software, and basically third-party software, available in a pre-configured state. It’s a modular platform and, in essence, you would select the specific modules and components which will be applicable to yourself. You then have a collection of SSP software and a selection of best of breed third party software. It comes in a pre-configured state and means we don’t have to hook in many of those components that users would require. Most important is that it has a significant degree of self-sufficiency where each client has their own components such as rating, rules and IP.
The other big challenge across Africa and naturally, global perspective, is the continual upgrade. What we do is to combine our offering with best of other shared components. If they get old, we simply replace it with something new. And just like that we’ve removed the capital, the requirement for costly upgrades, as we have continuing automatic upgrades that deliver functional improvements and efficiencies across the actual platform. And obviously, what that does is it reduces the cost of ownership for our clients.
Once we’ve won the client, we have to implement the solution in different countries and companies with different teams and languages which can obviously be challenging. Because of the nature of our system, where we develop, deploy and maintain our own systems, when the COVID-19 pandemic came along and changed the way everyone had to do business, SSP was able to pivot our workforce immediately.
Within a day, we were fully operational in the new environment. We’ve been able to transition our people and our processes, to be able to thrive in this type of environment.