Trust and insurance in a digitally transformed world

By Robert Shaddock, Head of Corporate and Business Insurance and Chris De Klerk, Head of Life Insurance and Innovation at Standard Bank

There is a growing fallacy that consumers do not trust insurance companies. Insurance is often perceived as a grudge purchase and insurers have the unenviable task of convincing many people of the value of protecting their future today, by taking out both long- and short-term insurance.

While customers do sometimes have poor experiences, these remain the exception and not the rule.

The truth is that any good insurer wants to pay out credible claims, unfortunately instances where customers feel they have received poor service are often more talked about than the good service which is usually delivered.

Today a single poor experience, with or without context, can be widely communicated through social media and often gains support and momentum, driving an adverse perception of the industry.

Recent high-profile cases involving repudiated insurance claims and reports on the handling of credit life claims in the wake of COVID-19 might have eroded some trust in the sector, but the truth is that insurers settle exponentially more claims than they reject, and people continue to buy insurance.

Even in the wake of the unprecedented events of the COVID-19 pandemic many insurance companies put in place significant measures to aid their clients in difficult times.

Most insurers proactively dealt with the challenges that they, their service providers and the clients faced last year. Insurers, as with other companies, were faced with loss of revenue and increased costs whilst needing to maintain operations across the value chain and protecting their employees.

In first six months of last year Standard Bank Insurance together with Liberty paid out R6.4 billion in short term and life insurance claims.

We provided extensive financial relief including 25% cash back on car insurance premiums, and a 10% discount on excess payments for home and car insurance claims.

We also provided funeral plan relief on a case-by-case basis and service provider supply chain support.

By facilitating upfront payments and settling our service providers’ invoices immediately, we were able to assist them to improve to their cash flow during this time.

In 2021 building on and maintaining the trust and goodwill which result from efforts such as these is something that the insurance sector must seek to do. They are essential to countering even perceived mistrust of the sector.

Digital transformation will be critical in helping insurers build trust and remain relevant with the communities they serve.

It is no longer a luxury for insurers, but a necessity to remain relevant in 2021. Clients want to be communicated with and serviced in the format, platforms and digital medium of their choice.

Digital transformation improves customer engagement exponentially.

Communication advances which have led to personalisation allow for regular and relevant engagement to educate customers and to create more awareness about the products and services that are available or have been purchased.

Capabilities such as process automation and personalisation enable insurers to spend more time on understanding what matters to their customers and delivering the appropriate solutions through channels that suit their customers.

And real-time support and training enables employees and brokers to provide the client with the right advice, solutions and products when required.

Process improvements are driving efficiencies and productivity within insurers’ operations.

Risk monitoring capabilities, such as adverse weather and traffic congestion, trigger real-time communication with at risk customers to help them to avoid the exposure.

Constantly informing and communicating with insurance clients is a key tool to maintain full transparency and constant consumer education for clients on their insurance covers and benefits.

Digital transformation provides the tools for both customers and insurers to interact in a transparent manner.

Many subjectivities and assumptions can be removed from a situation by using digital capabilities to collate the facts or to obtain the relevant information needed to make decisions.

Digital solutions will enable insurance companies to share the policy information with customers 24/7 and customers can access the same in their preferred digital platform and it can easily be made available in the language of their choice.

Serving customers through digital platforms, will increase distribution channels which will increase the accessibility of insurance to the wider population as more and more people become more technologically savvy.

Standard Bank has made significant investment to drive the digital transformation of the whole business to be better aligned across the various business units to provide customers with holistic solutions to address their needs.

We take the time to gather insights and understanding of our customers’ needs and aspirations. Armed with this knowledge, we can provide meaningful and relevant solutions that meet the expectations of our customers.

We also acknowledge that, from time-to-time, things may go wrong and take ownership of any such issues to ensure that the matters are resolved in a timely and transparent manner.

We strive to leverage the digital capabilities that exists within the group to improve on the accessibility, continuous education and designing fit for purpose insurance products that are appropriate to the African market as opposed to traditional insurance products.

All of this points to a more transparent insurance environment aimed at reinforcing the trust the which exists between insurer and customer.

Last year demonstrated that the world and the circumstances we live in can change dramatically over relatively short periods of time.

In 2021 insurers will have to show the same adaptability that they did in 2020 and they will have to continue embracing new solutions which allow them to communicate openly and honestly with their customers.

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