The South African life insurance industry has often been described as innovative by its international peers.
BrightRock CEO Schalk Malan recently delivered a presentation at the 2018 LIMRA conference – which was held in New York – where he pointed out the innovative nature of the industry and why international companies should invest in South Africa. FAnews spoke to Malan upon his return to South Africa.
Q: How is South Africa a hotbed when it comes to insurance innovation?
South Africa has always been one of the world’s most innovative insurance markets in the world. Critical illness products, for example, were first created in South Africa. Other innovations have included offering cover to impaired lives – people living with HIV and Aids – and wellness programmes.
We have seen many of these concepts exported internationally and becoming a widely accepted practice. A 2015 life insurance survey by Munich Re found that South Africa’s life market is considered a leader in product innovation by its peers around the world.
BrightRock and All Life were invited to present at the 2018 LIMRA conference in New York to discuss their product innovations. From the discussion at the LIMRA conference, as well as conferences where I have spoken previously, South Africa’s life industry is a far more dynamic and forward-thinking market.
I had the sense that our diversity as a society, the real issues we grapple with and our solutions-focus makes us more willing to take risks and put in the hard work to change the status quo. We are agile and responsive to change. We have also been quick to take up technology – if you look at our fintech adoption rates, we are ahead of many developed countries.
Q: What can international insurers learn from South African insurers?
From the discussions at the LIMRA conference, I had the sense that the international insurance industry is out of touch with clients and their needs. There is a focus on sales, rather than on product innovation.
The international insurance industry seems inwardly focused, coping with regulatory changes and trying to tack new ideas onto old legacy systems. I think that they could learn from our solution-focused mindset.
They need to change their perspective and look beyond their established systems and processes and constraints, to focus on understanding what people really need. Diversity is also something international insurers need to embrace.
Q: What can South African insurers learn from their international counterparts?
The international experience is in some respects a cautionary one for our market. I think the main lesson for us is to value what we have; the South African insurance industry is an asset, and we can be proud of what we deliver we must maintain our client focus, harness our diversity, and continually improve technology investment to build products that resonate with customer needs.
Q: How can South Africa insurers use these lessons when developing products?
South African insurers should acknowledge the advantages we have and be quicker to change and adopt new technologies.
We are fortunate to have a more dynamic, change -friendly environment. We are not as constrained by the over-regulation faced by international counterparts, and we can use technology to build products that put clients first.
Q: What are the cost implications of integrating these features into our own products?
Continuous investment in client-centric innovation is vital for the future of the insurance industry.
Through innovations like Big Data, insurers have a wealth of information available from various sources such as social media. Innovation allows insurers to solve clients’ problems and meet their needs more effectively. This ultimately delivers efficiency and better value for money.
Blockchain technology also presents extensive opportunities for reduced operational costs, through streamlining of identity management and underwriting to claims processing, fraud management and reliable data availability, all without the loss of integrity.
Therefore, our expectation is that integrating new technologies into our products will help to save costs.
- Schalk Malan is the CEO of BrightRock.
- This article was first published on 01 November 2018 by FA News.