At this year’s InsurTech conference, Theuns Botha, Head of Design & Innovation at Lightstone was invited to present on the topic, ‘Is technology killing insurance?’.
Lightstone is the leader in providing information, valuations and solutions, using data and technology to simplify complex decision-making.
During the presentation, Theuns highlighted that technology, and even very smart technology does not remove risk. Risk will persist. As such technology is not killing insurance, but it will dynamically shift how the industry insures.
Using technology will significantly improve, even advance how the South African insurance industry operates in an era of automation – from direct distribution and consumption right through to fully digitised claims processes. This is paving the way to adopt even more technologies for intelligent product development.
By using data to intricately understand an industry, its complexities, nuances, and needs, we can completely change the way of working. In the past insurers managed risk in large pools but today they can increasingly choose to what finite degree they want to manage risk. As mentioned, technology does not remove risk, but it can expose it more accurately as data richness increases, leading to more sophisticated and new service models and products opportunities at an increasingly rapid scale.
Technology is also changing the way in which insurance is consumed and it is not incomprehensible that clients’ requirements and requests could lead to tailored near real-time product development. Today client behaviour and needs are understood better than ever before – on an individual level, not as a collective. This has happened to such an extent that it needed regulation (like the implementation of POPIA).
Effective integration of technology and data is not an idea, we are living amid the revolution. The global crisis over the past 18 months has simply accelerated adoption by all participants at speeds no one could have anticipated. Albeit challenging for some, it must be the way forward, and understanding the complexities of data will need expert analysis for business to use to their advantage. These insights combined with technology-driven and more cost-effective client interactions could, for example, help insurers create service models and products in higher volume, lower margin segments that were previously deemed unviable.
This insight requires data, and this intelligence requires technology. Enabling the industry to focus on being the financial advisory experts they are at their core.
Technology is not killing insurance. Technology is changing the game.