Covid-19 pandemic forced South Africa’s insurance industry to adapt to digital trends

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Since the lockdown was implemented at the end of March to tackle the spread of Covid-19 a lot has changed in the work environment in South Africa and the insurance industry has had to adapt to ensuing digital trends.

Looking back, it is easy to see how the Covid-19 pandemic forced businesses to increasingly rely on digital technology to enable workers to perform their tasks remotely.

For the insurance industry, these tasks involve working from home using digital tools, online claim processing, online claim assessments and new client acquisition via digital platforms.

During the hard lockdown, many workers could only perform their tasks remotely using digital technology. The move by the government to encourage remote work was aimed at keeping workers safe from the virus.

In line with IISA’s mission to elevate and transform the insurance profession by continuously delivering quality programmes that contribute to skills development, the organisation encourages the industry to embrace digital technology while being mindful of the challenges involved.

The latest health ministry public notices indicate that the virus has infected more than 730,000 people in South Africa and killed over 19,800.

Many businesses have closed, and more than 2 million workers have lost their jobs.

Unemployment is, for the first time, hovering around 30 percent.

Figures released by Statistics SA earlier this month show that the country’s unemployment rate jumped from 23.3 percent to 30.8 percent in the third quarter.

In an article written by Arthur Goldstuck, founder of World Wide Worx and editor-in-chief of Gadget.co.za and published in May 2020, he writes that the Covid-19 crisis highlighted the accuracy of forecasts of growth in e-commerce, remote working, and learning, and medical services.

He correctly says the insurance sector provided examples of great foresight resulting in exactly the right kind of service for many consumers.

Goldstuck cites a South African insurance start-up called Naked, which provides quick cover and claims via an app, has for some time offered a “CoverPause” feature.

This allows customers who do not plan to use their cars for a period to pause the accident element of their cover and downgrade it to stationary cover.

Even though this cover was not designed for lockdown conditions, it turned out to be perfect for the new environment.

If anything, the Covid-19 pandemic has hastened the use of digital networks and practical use of the Fourth Industrial Revolution (4IR). This development requires that the insurance industry equip workers with new skills.

The Insurance Institute of South Africa (IISA) has been a constant source of information and guidance on how the industry can adapt to the new environment.

During the pandemic, digital technology also transformed the Health Insurance Industry.

For example, one of the things that was most unexpected for life companies was that the regulator intervened to stop medical tests in the underwriting process to free up laboratories to test for Covid-19 instead.

Many companies failed to adapt. Some of the traditional players were still using paper application processes in their broker models.

However, they soon found out they could no longer reach the customer.

These new business models, innovative insurance technology, and high customer expectations are forcing the insurance industry to perform a massive transformation in the way business is done.

In that regard, IISA has a primary responsibility to its members and the industry in general to promote the advancement of knowledge and skills, the maintenance of the highest level of standards and ethics as well as the professional development within the insurance industry.

The pandemic is not over and is still presenting risk management and logistical challenges for insurance agents, brokers, and financial advisors.

A 2020 Deloitte report suggests that insurers may have additional considerations when accommodating claims adjusters, who often need to travel to perform their jobs.

The Covid-19 pandemic had taught the insurance industry lessons about how the Fourth Industrial Revolution (4IR) can help to solve such problems.

For any industry to succeed, lessons must be learned from unusual situations such as the deadly Coronavirus outbreak.

Ronald is the executive manager at the Insurance Institute of South Africa.