Clinton Da Costa Brown, Business Development Manager, SSP Africa
I recently had the opportunity to attend the African Insurance Exchange at Sun City in South Africa where I engaged in fascinating conversations with industry leaders, enjoying the lively atmosphere.
As a representative of SSP, I’ve witnessed significant developments in the insurance technology sector, particularly in Africa. In this article I would like to reflect on the critical aspects and challenges of implementing new technology in the insurance industry, with a focus on the African market.
The Evolution of Technology in Insurance – The concept of leapfrogging technology has been a recurring theme over the years. Initially, it was about automation and how businesses could leverage technology to streamline operations. Today, the conversation has shifted towards artificial intelligence (AI), machine learning, and automation. The goal is to understand how these technologies can propel businesses to the next level. In South Africa, for instance, we see a more mature insurance market with advanced capabilities, but the rest of Africa is catching up rapidly.
One of the main challenges in implementing AI is the misconception that it’s solely a system problem. In reality, it’s a multifaceted issue that involves the customer journey, the strategic growth intent of an organisation, and the overall market strategy. Insurers must have a clear vision of what they want to achieve with AI and engage vendors who can align with their strategic goals. Different insurers have different needs, making it difficult for system vendors to provide a one-size-fits-all solution.
Another critical aspect is ensuring that core functionalities such as underwriting, reinsurance, and compliance reporting are met before diving into AI. Many insurers have experienced failed solutions due to a lack of clear vision and understanding of AI’s role in their operations. It is essential to have a robust core system before integrating advanced technologies.
The Role of System Vendors – System vendors play a crucial role in guiding insurers through the technology implementation process. Often, vendors are brought in at the wrong stage of the procurement process, which can hinder effective communication and understanding of the insurer’s needs. Vendors should be involved early on to provide strategic insights and ensure that the foundational elements are in place.
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At SSP, we emphasise the importance of partnership and collaboration. We aim to understand our clients’ strategies and provide solutions that align with their goals. It’s not just about selling a system but about building a long-term relationship that supports the insurer’s growth and innovation.
Insurers must decide whether they want to be market leaders or followers. This decision significantly impacts their approach to technology adoption. Being a leader means investing in building AI models and other advanced technologies, while being a follower involves observing market trends and learning from others’ successes and failures.
In Africa, the insurance market is undergoing consolidation and increased competition, which is beneficial for innovation and capital acquisition. Countries like Mauritius and Kenya are becoming quite advanced in their technological capabilities, while others like Rwanda are not far behind. The trend towards technology adoption is clear, with AI and other technologies being seen as enablers for growth.
One challenge insurers face is the potential instability of technology providers. Ownership changes at the parent company level can lead to shifts in strategy and support for existing solutions. It is crucial for insurers to conduct thorough due diligence, not just on the financials but also on the vision and stability of the provider.
SSP, for example, was acquired by Constellation Group, which has a unique model focused on buying, holding, and growing technology companies. This provides stability and ongoing support for our clients, ensuring that they can rely on a consistent and evolving technology roadmap.
The Future of Insurance in Africa – The African insurance market is poised for significant growth and innovation. Insurers are becoming smarter and more strategic in their technology investments. However, the customer experience remains a critical area of focus. Insurers must create new models and use technologies that align with customer needs and preferences.
The conversations at recent conferences indicate that African insurers are aligning with international trends, seeking to enhance their capabilities and improve customer journeys. The appetite for innovation is strong, and with the right technology partners, African insurers can achieve remarkable growth and success.