EMEA client engagement CRM

Digital Client Engagement Challenges in African Insurance

We cannot do business the way we have been doing business for the past five, 10, 15, 20 years. The customer demands have changed. We need to move with the times. And the key thing is, we need to remain relevant. Relevant to our customers, relevant to all stakeholders and we need to be able to remain engaged at all times in a manner that is meaningful to the customers.

—Thokozile Mahlangu, Chief Executive Officer, The Insurance Institute of South Africa

Client engagement challenges in Africa

What are customer expectations in Africa? It depends where you are and who you’re speaking to. The population is among the most diverse in the world—a kaleidoscope of languages, customs, beliefs, economic status and education levels. Customer expectations are not some monolithic notion universal to all corners of the continent. And even in areas that are fairly homogeneous, there are wide variations in behavior and expectation based on generational differences.

The bottom-line for African insurers—understanding what client engagement means to your customers and your organization is a complex matter. Finding the right end-to-end insurer solutions for digital client engagement may be even harder.

Insurance penetration is low in Africa

Overall, insurance penetration is still fairly low across Africa.

Most countries are registering below 1% penetration and that's a telling sign that either we're not appreciated, or we at least face huge challenges in increasing that number. If were not for the mandatory covers like for the motor third party and workers compensation, the penetration numbers may be even lower.

— Paul Kavuma, Chief Executive Officer, Uganda Insurers Association

Those numbers may seem to be describing a dramatic problem, but at the same time they present a big opportunity to implement solutions that will create significant improvements. Before we can create those solutions, however, we first need to understand the reasons why penetration may be so low.

Understanding customer expectations

1. Different generations have different expectations

The more mature generations of African insurance customers approach insurance from very traditional viewpoints, which effects everything from their preferred method of engaging with the insurer, to their attitudes towards the need for certain types of insurance.

In many cases, this type of customer is interested in face-to-face interactions with an agent. They are used to being able to go their local branch or office and dealing directly with someone who can help them work through the sales and application process. In some areas, cultural norms make people in these generations less interested in life or funeral insurance.

The younger generation, on the other hand, are more comfortable with technology and less influenced by tradition. If they see the value in a product, they are willing to buy—but they want that purchase to be completed quickly and with minimal frustration. They, like their the rest of their generation around the world, are more digital-ready. Their expectations are for on-line, almost real-time solutions whenever and wherever they want are ready to engage.

If you look at the demographics, the pyramid shows that millennials are now the next biggest consumer group. So, if we cannot live up to their expectations then, as an industry, we will be severely challenged.

— Paul Kavuma, Chief Executive Officer, Uganda Insurers Association

2. Cybercrime and internet availability

The technology that would make digital customer engagements possible can also create a further layer of challenges for insurance in Africa. Increased reliance on technology brings with it an increased risk to the security of client data and the potential for cybercrime.

Customers are aware, alert, engaged and involved. They need instant responses, instant communication. But it’s a real challenge to deliver on those expectations when tech infrastructure is unreliable—even down to the level of our power grids in some areas. Power outages are unfortunately common. Online connectivity can be spotty and, even when its working well, data plans are expensive for most people.

3. Fraud and trust baggage

The rising incidence of insurance fraud has created issues for all customers because high fraud rates make insurers more careful and questioning during the claims process. That attention to detail lengthens the claims process and can lead to some claims being denied. Both of which create customer distrust and poor customer experience.

As a result, the public is carrying a lot of trust baggage when it comes to their perception of the industry, especially when you factor in the high-profile publicity that insurance inevitably receives when things go wrong.

4. A conservative approach by insurers has decreased customer interest

Generally speaking, the African insurance industry has remained quite conservative compared to approaches taken in other regions. And that has bred disinterest amongst potential customers.

Insurers tend to persevere with old methods of selling traditional products. Opportunities to rethink business models from a customer-centric viewpoint are not being seized. Yet, there is a customer desire for new products, priced, paid for and delivered in new ways.

Defining customer engagement goals

It is critical for African insurance organizations to clearly define their client engagement goals. A process that requires the whole company looking at their practices through the eyes of a customer and finding ways to streamline workflows, automate processes, remove frustrations and add greater value.

In terms of being more customer-centric, especially to meet the expectations of the growing younger audience, it’s necessary for insurers to be able to offer omni-channel service that addresses all types of needs—from agents in an office ready to meet with clients, to digital sales and service tools that can facilitate interactions online.

Take, for example, the fact that motor insurance premiums are still paid annually. That’s not beneficial to customers. It could be paid in smaller, more frequent installments. The coverage could be for shorter durations. By fitting the product to customer needs and driving new adaptations with technology, it would be possible to have flexible premium amounts according to mileage driven and driving style, which is becoming common in many areas.

Technology solutions and current capabilities

Once the goals have been set, the next step is to understand the capabilities of the current IT infrastructure and what will be needed to achieve the customer experience targets. In Africa, digital delivery, can be hard to implement because of the legacy policy administration systems that do not have APIs that can speak to technologies that are being used by the current customer. And, in many cases, the level of investment needed to implement modernizations and transformations can present significant challenges.

What are insurers in Africa doing about it?

In our recent Client Engagement webinar, attendees painted a very clear picture of the situation they face in Africa. Unfortunately, most companies are stuck in the status quo:

Client Engagement Challenges in EMEA Poll Results WEBINAR

Watch the Digital Client Engagement in Africa webcast to find out how insurers in the region can get ahead of the status quo. Find out how to build successful client engagement strategies and implement the right technologies throughout the value chain to solve customer engagement challenges.

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