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The Covid-19 pandemic has ushered in ample opportunities by accelerating the digital transition of tasks that were once considered mundane. In recognition of the importance of this, almost all players in the insurance sector are digitising – some more seamlessly than others. This ‘phygital’ (meeting of the physical and digital worlds) trend is becoming omnipotent, with a blend of automation and human expertise now the norm. It is expected that in the next five years, a major innovation will occur in the way products are digitally distributed, including in the underwriting and tracking process.
During this pandemic, we have also seen a shift in client expectations. There isn’t really a workday in the digital world. People expect 24/7 availability, so we have seen our broker partners working longer hours. There also has been an added increase in people requesting quotes, probably driven by the desire to cut costs. This has meant that those with a digitally-enabled quote functionality had a decided advantage.Business has moved from being complicated to being complex. A complicated world is characterised by patterns that repeat, problems that can be resolved through mathematics and design, and where automation and efficiency drive management thinking. In a complex world, there are patterns, but they don’t repeat, problems can’t be predicted and robustness, not efficiency is most required.
Insurance cannot respond to growing risk in a complex world by offering the same products. A shift is required to loss prevention and management, to ecosystems of value and to the generation of new revenue streams across the full risk value chain. Digtisation is a key enabler of these ecosystems.
Here are some of the digital trends we have seen – and expect to continue seeing – over the past year – particularly ramped up by the Covid-19 crisis:
The biggest industry trends will be in the product distribution space especially with the phygital approach remaining a top trend in the insurance sector, as consumers seek digital experiences and self-service, on-demand options, including valuable human contact with service providers. We are also likely to see more demand for pay-as-you-go insurance services, including new, innovative risk management products that provide niche cover for things such as cyber threats.By Kevin Wright, Chief Information Officer Santam Group
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