The Sunday Mail
Tawanda Musarurwa
Last October this writer wrote a piece that sought to highlight the significant potential of blockchain technology to transform the insurance value chain, creating a more secure, efficient, cost-effective, and customer-friendly experience.
“The article is a bit too futuristic,” said an insurance industry player at the time.
Having already made an impact in the world of cryptocurrency, there is still growing discovery of other ‘real life’ uses for blockchain technology.
So perhaps the individual was right, but the crux of the article was to highlight the need for digital transformation within the local insurance sector.
This writer probably failed to get that point across, but Covid-19 certainly has not.
It’s an issue that was recently expressed by Insurance Council of Zimbabwe (ICZ) executive officer Tendai Karonga who said the Covid-19 driven work-from-home routines have brought about (or at least highlighted) some service provision issues.
“The increased provision of service through digital platforms resulted in the creation of a service gap as some companies did not have information technology (IT) systems that could be accessed remotely,” said Mr Karonga.
But the problem of deficient online systems goes beyond the insurance sector per se.
“Major challenges faced included lack of online systems, poor internet connectivity and lack of internet access by some clients,” he added.
An industry insider, who spoke to the Sunday Mail on condition of anonymity for professional reasons, said the rise in work-from-home routines had highlighted the need for cyber security.
“The concept of going paperless needs to be a reality; to revisit some time-honored audit requirements like having physical sight of an original certificate of death before a death claim could be paid, for example.
“Going paperless will also entail greater use of electronic signatures. And the issue of security around electronic signatures for the processing of claims and other payments is key.
“What Covid-19 also brought to the fore was the need to enhance capacity for people to be able to work remotely but still be able to access servers located at head offices,” he said.
“With regards to the issue of data storage, the pandemic has made the industry want to engage the regulator (Insurance and Pensions Commission) on the issue of restrictions on making use of cloud for storing data.”
In view of the volumes and sensitivity of the data typically collected by insurance companies, experts say data integrity, effective intrusion detection and prevention systems and simple data availability should lie at the core of their information management systems.
The Justice Smith Commission of Inquiry, which was appointed in 2015 to probe the currency conversion process indicated poor record keeping as a blight in the insurance and pensions sector in years prior to 2008.
Too futuristic?
Simply put, blockchain is a ‘real time’ ledger with strong encryption such that transactions cannot be altered once entered. Its clear to see how this novel technology can help, at the very least, the local insurance sector keep their records better.
Customer service expert Ashley Matsangaise says Zimbabwean businesses were rather slow to the digitisation game, but are now forced to adjust.
“Covid-19 has come in to expedite the (digitisation) process, which had already been long underway, and companies had to hit the ground running. Agility is going to be key going forward in terms of ensuring that organisations are able to reach their customers.
“Businesses need to remember that customers remain the key pillar. In the new digital economy, the omni-channel customer experience needs to be enhanced because clearly customers have moved from conventional to digital platforms and businesses have to be where the customers are,” said Matsangaise.
Covid-19 or not, customers generally have a level of service quality standards that they expect. And for insurance firms, at least meeting those expectations can be the difference between profitability and survival of these organisations or extinction.
In recent months (and perhaps even before that) a number of local insurers have been failing to meet these expectations.
“It’s amazing that I always have to resort to costly phone calls to do business with these firms despite them being available on these various social media platforms. I was interested in joining a policy with one insurance company a few months ago, and I tried contacting them on Whatsapp, and then Twitter but all I got were generic robotic responses which didn’t actually answer my question or concerns,” said Tendai Moyo* (name changed).
“It’s not logical that I have to beg to do business with them.”
Tendai’s experience highlights that some local insurers are failing with regards to meeting the key principles that underpin successful relationships with their customers, namely: resolution, expectations, time and effort, personalisation and empathy.
This is particularly important given the weakening financial performance of the local short-term insurance sector.
Official numbers from the Insurance and Pensions Commission show that the sector’s growth in gross premium written increased by 689,18 percent for the period January to June 2020 compared with the same period in 2019.
But in real terms, after adjusting for inflation of 737,30 percent, the sector’s gross premium written declined by 6 percent and assets by 5 percent.
Beyond just ensuring effective service provision and resultantly improved profitability, the revamping of existing insurtech systems could help local insurers overcome their traditional long and complex contracts, which are distributed through costly networks of agents and brokers that only reach the urban elite.
