Insurers urged to embrace new ways to catch-up with the future
To catch up with the future and align with market realities influenced largely by changing customer taste, technology and globalizations, insurance companies in Nigeria have been charged to embrace new ways of delivering their services.
Experts at PwC said that the world is changing faster than ever and a number of megatrends will shape the global economy and financial services industry including insurance, over the coming years, which leaves service providers at risks of extinction for those who remain with traditional culture.
Andrew Nevin, financial services advisory leader and chief economist at PwC Nigeria who delivered a paper with the theme “Financial Services in the Next Decade” at the 10th Anniversary Celebration of Consolidated Hallmark Insurance Plc (CHI) said customer behaviour is evolving and customers will make informed choices that reflect lifestyle.
Nevin noted that it is easy for incumbent firms in financial services to under-estimate the impact and the progress of new ways of engaging the customer.
“Customers do their own research and comparisons which leads to more informed purchase decisions. Customers have more devices than ever, and make demands when they want Companies have developed the capabilities to personalise services in real time.”
“Now customers expect companies to serve them directly and to suit their own unique needs, as they interact with businesses over multiple channels and expect the right experience to be delivered on their preferred channel”
Nevin reviewing the Nigerian insurance industry, said the reasons for the low penetration at 0.4 percent includes poor public perception of insurance, absence of innovative products and distribution channels, poor monitoring and enforcement of mandatory policies and complex and lengthy policy and claims processes.
To meet changing customer needs with new offerings and increase penetration in the future, the PwC boss noted that insurers must customise insurance solutions; enhance interactions and build trusted relationship; remove large, entrenched bureaucracies and offer seamless customer experience; use new technology and services to increase access to information that can empower consumer decisions; form strategic Alliances.
“Joint ventures and partnerships between intermediaries, service providers and reinsurers are a good way to augment existing capabilities and establish symbiotic relationships, Nevin stated.
On the importance of Data, he said “Increased processing power and smarter analytics will pave the way for more informed prevention, risk selection and premium pricing, allowing Insurance companies offer cheaper and more personalized products, while still sustaining margins”
Looking into the financial services industry in the future, the experts predicts that by 3030 there will no longer cash transactions; insurance will become co-creation on risk and not loss mitigation, ethical issues will become higher in insurance; asset management business will be almost completely automated; banks will be almost invisible with fewer or no branches and no financial crime.
Other predictions include that 90 percent of transactions would be via mobile; 99.99 percent of transactions would be electronic; people will own their own data and if you are not the best in analytics, as a service provider you are not in business, the expert warns.
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