Insurance is often personal. Even when a large institution acquires an insurance policy, it's often still through a combination of personal relationships, trust and customers who feel the insurance representative is taking their needs seriously. Though digital technologies improve insurance distribution, personal interactions remain crucial for growth.
This dynamic is particularly strong across African countries, where 80% of insurance groups rely on person-led sales and servicing. Yet, distribution remains inefficient despite the gains of digital technology. The cost to serve is still too high and the speed to serve remains too low. How can insurance businesses break this stalemate and get value from digital, while still supporting person-led sales and services?
"The challenge for digitisation in South Africa is twofold," says Carl Blake, Enterprise Account Manager at ServiceNow. "The first one is data and the cost of data, and the second one is the demographic that we are selling to. Access to digital services is still very constrained because of factors like data costs and access to devices. It's much more expensive to create a seamless distribution. The second challenge is that most insurance sales are still done on a person-to-person basis by internal agents and distribution partners. It's proving difficult to integrate digital systems with those people."
Insurance's legacy barrier
The first challenge is not so much an issue if insurers can address the second challenge. Over time, data costs come down, and consumers trust digital channels more. But insurance remains a people's business in South Africa. For example, selecting a funeral policy is a culturally sensitive and personal process for many South Africans.
If insurers can improve distribution among their staff, partners and self-service portals, they'll see more value from digitisation.
"A large percentage of policies in South Africa are serviced and sold via broker communities. These are independent companies and persons that do not work for the insurer but sell policies on behalf of the insurer. They need to be fully integrated into the insurer to speed up that transactional process," says Blake.
But legacy systems are creating barriers. While front-facing insurance systems deliver vibrant, modern and intuitive digital engagements, back-end environments tend to include complex and custom-tooled applications, and older, stubborn legacy systems.
"There are insurers with systems that were developed in the 1990s and some even earlier than that. Because of the duration of a policy, they are still servicing clients of those systems, which cannot be shut down or repurposed. So, the ability to take your digital front-end and integrate that to your legacy back-end becomes a key success factor in seamless digital distribution," says Jack Govender, Solution Sales Executive for Customer Workflows at ServiceNow.
Digitisation, legacy and integration in one
Insurers rely on many applications and processes to offer enticing products, convenient service and relevant information while meeting regulatory requirements. The goal is to tie all of this together to a single digital thread, while integrating with partner brokers. The way to score that goal is to leverage the right platform technology.
"A modern service platform that focuses on insurance verticals connects multiple applications and digitises the processes across these applications in a simple way," says Muhammed Omar, ServiceNow's Country Manager for Africa. "Whether you're doing a funeral policy or a claim around your vehicle — whatever it is, you've got a consistent engagement from the perspectives of customers, partners and the back-office. It makes distribution much simpler, faster and more convenient."
Insurers must rein in multiple systems, applications and data sources that serve different needs. They must integrate and automate these into a unified digital ecosystem and make those services available where needed — from self-service for customers, to portals for third-party brokers.
Future-readiness through service platforms
Service platforms like ServiceNow unite disparate systems with vertical-specialised solutions without disrupting the underlying plumbing and processes. For example, ServiceNow's Financial Services Operations for Insurance solution unifies claims, servicing and underwriting processes with a single system of action, lets employees improve processes with low-code application development, and integrates legacy systems of record and data silos without disrupting them. It's such a potent package that Forrester rated the solution as a leader in the insurtech space.
"There are a lot of disparate silos, there's digital sprawl," says Govender. "But by using a unifying platform, we're helping organisations become a lot more future-ready. The efficiency through automation and streamlining, without messing with crucial applications and processes, creates a big change. Those insurance companies are between 1.5 and 2.8 times more profitable and have a 30 to 40% reduction in administrative tasks."
Service platforms unite digital innovation and human capital. They connect the front and back of insurance environments. They make it easy to securely provide brokers with access to insurance services. They also provide modernising features such as automation, real-time reporting, and no-code development.
"Insurers can rely on a platform optimised for the insurance industry," says Blake. "They don't have to go out and build these things that they need to serve their customers. The right service platform makes it easier for them and their customers to engage and adopt those capabilities for a multitude of use cases."
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