Experts have observed that InsurTech can address some big challenges that currently confront the insurance business, including lack of consumer knowledge, lack of access to consumers, differing consumer needs, low trust, inexperienced customers and high-cost structures.
They however noted that InsurTechs tend to focus mainly on increasing access and lowering costs, and many are still stuck at the digitisation stage.
The first expert Forum of 2020, moderated by Katharine Pulvermacher, Micro Insurance Network (MiN) executive director examined the hype around InsurTech and how it can help scale up inclusive insurance in emerging markets.
Pieter Janse van Vuuren, research analyst at Cenfri in South Africa, pointed to recent data from Willis Tower Watson suggesting that InsurTech is attracting billions of dollars in investment – more than $2 billion in Q4 of 2019 alone.
The Cenfri InsurTech database tracks 292 InsurTech companies in 85 countries, with Africa leading the way. But, said Pieter, they tend to focus on existing, easy-to-reach markets rather than new customers.
What are the biggest challenges faced by microinsurance that tech can solve?
Sarfraz Shah, project manager of Micro and Agriculture Insurance at APA Insurance in Kenya believes that outreach, trust and awareness as well as understanding of insurance can all be solved by technology.
InsurTechs can help insurance companies think beyond the big cities, help them think about that person who lives in a remote area and has never even heard of insurance.
He recognised that when one looks at policy documents, insurance has been packaged so it isvery difficult to understand.
“Technology can help by making access and distribution easier,” said Sarfraz. “In Kenya, for example, Pula enabled a partnership with MNO Safaricom which has 33 million customers, 15 million of whom are farmers, who now have access to agriculture insurance. That’s a big hope for me – in coming years we’ll see more and more of that kind of thing.”
Brandon Mathews, CEO at Stonestep in Switzerland, said that without tech, serving mass populations is a pain.
“Making collections of less than five cents a day, tracking whether they paid the correct premium – you need an army of people to do that,” he said. “When we started in Brazil in 1999 our claims adjusters were doing about four claims a day each, by the time I left in 2007 it was 120 a day. The best is yet to come, building trust through technology.”
Modestus Anaesoronye
